I think I'm the only one speculating about CoH2 not being in Paragon (but kudos to me for making you think it's a widespread phenomenon, I guess!). I proposed it as a way to avoid weird storyline issues that may come up between CoH and CoH2. The way I see it, there are two reasonable possibilities for a CoH2 that takes place in Paragon City: 1. It starts right after CoH ends, or 2. It takes place several years after the timeline of CoH.
There are some issues with option 1: The devs need to make sure that whatever storyline they go with fits in completely with CoH - that might might mean they go with the Battalion et al. storylines revealed in the AMAs, or they find another way to be internally consistent. Either way they will be somewhat limited in their story telling ability because it has to be tied in to CoH. This also means that existing NPC heroes will be exactly the same - not necessarily a bad thing, but maybe it'd be better for marketing and players experiencing variety if they had new people to focus on. Additionally, the problem of player characters arises. There will no doubt be some way to link a character in CoH to a character in CoH2, but I do not believe for an instant that we'll be allowed to get a max level character in CoH2 right off the bat. So that leads to an issue with suspension of disbelief: "My character was a top-level hero at the end of CoH's storyline, and now he / she has to start from 0, and no one remembers them, just a month later?" Maybe they can tie in a badge that changes dialog, but they still can't explain the loss of power very well, without forcing some sort of RP event on people, who might not want their top level character reduced to 0. Sure, you can hand wave it and just say it didn't happen, but that could be annoying. It's generally fine by me, but I imagine some RP players will not appreciate it.
With option 2, the issues are different. If there is a time jump, that means that something happened between CoH and CoH2. While this makes for a better way to explain differences in NPC and player characters from the 2 games, it also means that some people may be disappointed with whatever deus ex machina that's used to explain those changes. Additionally, there's not a lot of things, other than the Coming Storm, that could explain it, and some have said they want to experience that, not just be told "it happened off-screen before CoH2, you're dealing with the aftermath." The time jump does allow for a shake up of signature NPCs, and depending on how it's played, more freedom with storylines, but might turn people away if it doesn't fit the general "spirit" of CoH's story.
The third (and unreasonable) option for a CoH2 in Paragon City is to just make the exact same game, with the same storyline, missions, NPCs, everything - but in a new engine. This would be a bit of a disappointment to many, and would probably be a waste - why recreate when you can expand? Not to mention that some of the older missions are very linear, and presumably a new engine will allow for really cool gameplay and stories right off the bat.
The reason I'm suggesting a CoH2 set outside of Paragon City is that it would eliminate essentially any and all problems with storyline and with trying to make the game be as close to CoH as possible without redoing it. Setting CoH 2 in another city is one way to do this - it allows the new devs to create their own stories and locations within the CoH universe, and gives us a taste of life outside Paragon, while giving us a very similar feel to CoH. Plus, I'm curious about other cities in the CoH world - we always hear about them, or about organizations that are national or global in scope, but we only see a very small glimpse of them in the Paragon / Isles area. This is why I also think it would be cool to give CoH2 a more world-wide scope - let us see everything that happened while were in Paragon!
Not only does this allow for player characters not being present to be explained, it also allows a game taking place at the same time as CoH to happen. You could have a CoH2 take place in Chicago - all of its inhabitants were swallowed by Mot, and it might be fun to play a hero fighting against Mot, just trying to hold your own, even as the heroes in Paragon resolve the issue. That's maybe not the best example, but being able to take part in the storylines we used to play in Paragon from another perspective would be quite fun. There's any number of things that happened during CoH that had national or international impact, and exploring them from outside Paragon would be a great way to experience them. Plus, you could have cameos from CoH signature heroes once in a while, even if the new game has its own set of heroes. We only ever learned about 2 members of the Dawn Patrol - let's go to London and meet more! Or be assigned by the FBSA to take care of an issue in Albuquerque, where a genius chemistry teacher has developed a new super drug to rival superadine! The best part about this is that even if we take part in CoH's global stories from another perspective, there's TONS of new material that could be written, that wouldn't conflict with any of CoH's storylines. It also allows the game to have any sort of environment the devs want - Croatoa was added to avoid the monotony of "city city city" and a world-wide game would avoid necessities like that (not that that was a bad necessity, it's just that there will be more freedom of environments than in a city).
A hahahahaha!! 
I wouldn't make anything based on breaking bad
. If something was to take place in Albuquerque, make it an original plot. Honestly, I'd rather more than one city for a game to take place in. Paragon city got old after a while sometimes. On the other hand, I hate it when I have no water in an environment, to. I kind of do, it gets old. I actually live in Albuquerque so if anything, please at least also include the Rio Grande if you do have Albuquerque as a game setting. It's a beautiful river and there is a lot of life around it here. I actually live close enough and I can tell you it's like a small oasis/jungle here. Surrounded by desert, yes, but there is more to deserts than just rock, sand and sagebrush.
