It would be awesome if they did,but, knowing Nintendo they'll probably won't let them.

I bet Retro could do an amazing Zelda game as they are one of the most talented developers out there, but I really don't see the need. Their current status as a revitaliser for Nintendo franchises suits them well but I'd like to see them work with something completely original as well.

I could see them handling a 3DS Zelda just fine. Personally though, I think they should be allowed to develop a new IP. There's a lot of talent there and I bet they could come up with something great if given the chance.

werent they were making one years ago but it got cancelled

I´d like to see Retro test their hands with a survival horror game.

We've seen Metroid return in first person last gen, and excite, punchout, DKC, pilot wings and kid Icarus returning this gen.
What other revivals can we look forward to, from Retro or anybody else?

StarTropics
Ice Climbers - perhaps a modern cinematic drama with heavy emphasis on story and characterization
Star Fox/F-Zero
there is a mach rider resurrection rumored...
wrecking crew

"Zelda has done no wrong with its current talent pool"

The series sales in Japan, and diminishing returns since Twilight Princess, show there is wrong being done. Nintendo wasn't pleased by the used sales of Spirit Tracks, after all.

If I was in charge of Nintendo I would assign Retro to develop a new IP to the Western taste. Zelda is in good care with EAD.

Not on a Zelda title, I respect them for their work they've done, but not on Zelda at thins time. Maybe another IP from Nintendo that is in dying need of a revival or a totally original like others said...

Zelda Skyward Sword Thread updated