I'd like to see a setting that was a mix of Jack Vance's "Lyonesse" trilogy, Poul Anderson's massive "Kindgom of Ys," and similar stories that tie into a "late, post Atlantis" mindset. So yeah, somewhat dark ages, but mix in some of the fantastical too. (I suspect the two series aren't entirely unconnected in their central geography, either, though Anderson's uses a mainly historical version and Vance does not.)
They'd have to tone down some of the more adult element of "Ys," and the fairy tale elements in "Lyonesse" provides a good model for how to do that.
Then as the setting is expanded, you add more fantastical elements along with regions that are kept about the same but different cultures (e.g. Norse analogs). This leaves about half the core setting as something you can play as minimally fantastical or occasionally mythic, with the rest as sometime more traditional to D&D that still fits within it. (I'd have orcs, elves, etc. work as explanations for the settings' Atlantis equivalent monkeying around with human genetics. Or you can go with typical D&D multi-race creation myths.)