I think it would fail.
Diablo is purely combat and multiplayer driven. That's what the crowd out there will be expecting. Larian are far more interested in creating a deep RPG than a strategic combat game. As soon as the reviewers see it – and it will be reviewers who loved Diablo 1 and 2 – they will be very disappointed to see their action interrupted by stories and talking and NPC interaction (other than selling loot). I say let Larian do Divinity and leave Blizard North with Diablo.
