As it stands, there really is nothing that can be done to "save" Sonic anymore. Any effort Sonic Team can make now can only "redeem" him, if that. They should start by going back to the side-scrolling days, just with 3D backgrounds (no 3D planes, just 3D backgrounds and effects). If they want to do 3D, they can do Sonic Adventure 2 style. But lets correct a lot of the mistakes Sonic Team has made over the last Decade.
1. dont put sonic in 3D.
2. if you must do #1, then dont give him (or any of his characters) a gun.
3. dont give him a sword.
4. dont put any of the characters in mechs that control like a walrus.
5. dont make him a wolf-hog.
6. dont bother making a story, its always been Sonic Vs. Robotnik since the dawn of time, nobody really expects any different.
7. if you must make a story, at least do something thats tried and true (SatAm, Sonic comics, Sonic X, theres plenty of material out there)
8. No. fucking. humans.
9. if you must add in humans, make them a means of telling the story, not the story revolving around them.
so, now we can make the most epic sonic game ever.