If the demand is there, people will buy it, and companies are notoriously fickle about losing money. For those three or four seasons on VHS, you can bet that two or three seasons made profit, and as soon as the final released season lost money, they cancelled it.
I think it's that DVD is good enough mentality that will probably stop TNG-R coming out on DVD. If you have a mid range HD TV, between 35 and 45 inches, then a DVD upscaled will look reasonably good. There's a reason why I'm not running out and double dipping on all my movie DVDs. If it's anamorphic and not letterbox, and if it's a fair transfer, then it's good enough to enjoy on my home cinema without me whinging about clarity or definition.
The original TNG DVDs upscaled to that midrange look like pants to me and upgrading those is a no-brainer. If I have the filmic quality TNG-R on DVD and upscaled that, I wouldn't feel any urge to upgrade that to Blu as that would look good enough to enjoy (obviously nowhere near as good as Blu). That's a strong reason not to release TNG-R on DVD anytime prior to the release of all seven seasons on Blu.
I'd expect Paramount to release it on DVD afterwards, in stripped down, extras free, episode only collections, to eke out every last penny from the few Blu-ray refuseniks that will be left then.