The question is where the new setting would be. Personally, I'd rather it didn't revisit Vice City or San Andreas. In all likelihood, the new GTA would take place in a modern 21st century setting, which wouldn't mix so well in the other aforementioned locales. Vice City worked well because it was set in the 80's where everyone wore pastels and the all the music had synthesizers in them, a very Miami Vice feel to it. Similarly, the 90's gang violence of San Andreas set to songs from the end of the golden age of hip-hop and the emergence of gagsta rap had its own unique feel to it that wouldn't translate so well in a more modern setting.
So what that leaves us with is either one of America's other easily identifiable well known cities (all I can think of is Chicago and DC, although Honolulu would be interesting if they allow island hopping and go for a Hawaii Five-0 setting) or a more foreign, yet easily distinguished locale for western audiences like England, Sydney, or maybe Paris. The free roaming sandbox genre in Japan has essentially been cornered by your Yakuza and Shenmue types of games, and while Hong Kong and Beijing do present interesting alternatives, navigating them would be a nightmare cut-down game world or not. As for Latin America, we have Mercenaries 2 and Just Cause 2.
Edit: Rockstar could go for something taking place in Texas that frequently crosses the border over into Mexico, but then there's the issue that they might just be retreading Red Dead Redemption.