Was.
Sonic has been on an improvement curve ever since Fresh blood was infused into Sonic team. Unleashed wasnt perfect, in fact, it had the worst Sonic gimmick ever, but the Daytime gameplay was very good. Fans liked it.
Then Sonic 4 was announced and released. Not perfect, (far from what it should have been) but Sega actually MADE IT.
Then Sonic Colors was released. It takes the daytime segments of Unleashed, makes boosting less abusable, did away with the "true last story super evil boss that upstages Eggman" and actually had the egghead as the final boss, no strings attached. it was all Eggman from start to finish. The Wisps, while a gimmick, were very optional, (Very few areas actually forced it. If Super Sonic can get through stages just fine, then it wasnt forced) And they were a COOL gimmick. Something swords, guns, vehicles and wolfhog transformations were not. (and it got very favorable reviews too) And now, a 20th anniversary Sonic game is announced that features Not only the Unleashed/Colors gameplay, but Classic sonic. With classic gameplay as well.
The story will involve time travel, but its not like Sonic is a stranger to that. (and I don't mean Sonic 06) friends will appear? from across Sonic's 20 year history? That brings opportunities to bring back forgotten characters like the Chaotix. (And Mighty the Armadillo) So far, they are not playable. Simply as cameos and story elements.
Sonic is coming back. And he is very damn close.