Awesome fellow SEGA fan news site SEGA Driven have just posted this visually impressive fan remake of the Blue Sphere special stages from Sonic 3/Sonic & Knuckles. It appears to support custom levels, and so I would assume a level editor too. You can also see in the video remakes of stages from the original games in this engine.
Something like this could do well on XBLA/SEN at a very cheap price point, with custom level sharing features. I wonder if SEGA would ever consider picking up a fan project like this?