"Sometimes the game industry seems so submerged in established franchises and straight-off-the-conveyor-belt sequels it seems impossible that any new IP has a chance of being noticed. But for every twenty Christmas cash cows that infest store shelves with their mediocrity, there is that one sequel we deeply yearn for – that great game that demands another shot at the big time but is bewilderingly ignored. Maybe it has merely become lost in the forgotten back catalogue of a now defunct publisher or perhaps it has been buried beneath the egotistical loggerheads of past-it developers, given up on and stuck in developmental hell. Unable to find the light as fans yell from their couches… encore! Encore! Encore!"
From here this article at Gameplayer details fifty games that never received a sequel, but most certainly should have.