So how about this for an idea. 3.0 in 2000 took a different direction and it was more like AD&D 3E vs the 3.0. Could also be renamed to D&D sold on unifying B/X and AD&D.
It survives until now but went through incremental changes.
What changes did you think happened an when?
Things that still happen in 2000.
Ascending AC
Skills replacing WP/NWP
Unified Ability scores (BECMI range?)
Things I'm not sure about.
Feats (probably added 2000 still)
Thoughts?
So, if I'm understanding correctly, we need a
minimal set of changes from 2e to 3e in order for it to go 3.1, 3.2, 3.3, ..., 3.9, 3.10 etc. with current 5e being some point along that smooth curve?
Feats definitely still need to happen. Without them, or something essentially equivalent to them, you can't get a bunch of what 5e offers.
Let's see...
Magic items are going to be dicey. You can't put the genie back in the bottle here. If you put out rules for how magic items can be created, with prices and such, you...really can't iteratively declare those things null and void. Without the grognard allergic reaction to "Christmas Trees" or "Magic Item Marts" from our world's 3e and 4e, there doesn't seem to be any motive for this "AD&D3" to work so hard to exclude magic items--especially because players are so magic-item-positive in general. Not really sure how you could address this one.
You'll need to standardize races. 3e tried to have its cake and eat it too with "level adjustment" and the like, which failed miserably. I think players would rightly cry "power creep" if you start from a 3e-like LA+N regime and then later transition to what we now see in 5e (all races designed to be, effectively, LA+0; no ability score penalties; no templates; etc.) So you'd have to have some reason for why all races are starting out
intending to be on more or less an even keel with a lot of modern sensibilities either already baked in or at least not baked
out, as it were.
Subclasses are in a weird position. IIRC, 2e had this whole idea of class "groups" where for example Cleric and Druid were both part of the "priest" group, or something like that. Potentially, your AD&D3 concept could thus smuggle in the foundations of subclasses with its reset-changes. Then, later on, things like 2e "kits" can be re-integrated through the ACF concept, but as package deals rather than piecemeal.
I'm sure a number of people will cry foul on this, but dragonborn would need to be added prominently and (relatively) early, same with tieflings and a few other "exotic" races that are now quite popular. Part of the effect (whether benefit or detriment depends on who you ask) of an edition "reset" is that it puts new options in the limelight in a serious way.
I suspect during the 2000 to (roughly) 2009ish "no subclasses yet" phase, you'd need to make a lot of classes, but then give them little to no support thereafter, so that the subclass variation becomes the "this is the iterative update version of that thing." It'll still be a bit weird and hard to explain in a purely iterative way, but I can see a finagling of it.
Overall I just don't think this works conceptually. A bunch of the ways D&D developed were specifically
because of long-term reactions to major, discrete changes in the rules from one "reset" to another.