It sounds neat on paper (or in this case typed) but there's a couple things that make Legend of Zelda great that would make it difficult to be a multiplayer experience, especially on a 3d platform. One of the perks of Legend of Zelda is having the ability to do whatever you want, go anywhere, relax. With 2 people, there's a lot more focus and pressure on the players to just go straight through the game. If both players are patient, it might not be a problem...
The choice seems to be open adventurous world with one player, or more closed in 2 player action.
Some games can make the transitions easier because of consistency or at least being a little on the linear side. For example, Resident Evil 4 and 5. 4 worked really well alone, there's a lot of action and it is pretty much linear with a minigame. They basically reprogrammed the game to work with 2 people. Once again though, this game is more action than adventure.
The reason why four swords worked out well was because of its good use of 2d. Players can share the screen and get stuff done. That game also dummied down the exploration content to work on gameplay for four people.
A Legend of Zelda splitscreen/or online experience may stop a player from exploring and enjoying the game...especially if all the places they go would need 2 people to do it. Better find a good partner.
They would have to pull out a new or tried and true method to get it to work. For example, in Psi-Ops for PS2, two players worked off of one character. One player would control movement and guns, while the other player would control aiming and psychic powers.
Here's an idea:
That "other Link" could be a phantom that pops out of Link when player 2 wants to walk around and help out for a limited time. They'd have to work on the camera angles, but that is just one possibility. It allows for one player to play and 2 player to join in if they feel like it. Each Link could share and exchange their items to make the puzzles more interesting. Just an idea though...
It could have potiential, but somehow they would need to combine Nintendo's fun storytelling and ideas while balancing an adventurous experience.