This is the first game I have seen that tries to re-imagine Sonic as a physics game. That probably makes it closer to the original spirit of the game than anything SEGA have done.
I know this is not quite like your game design, you seem to be channeling f-zero and wipeout a bit, but I have always thought Sonic should be a sort of racing physics game with no set direction.
All the sonic 3d games rigidly stick to the same idea of a narrow straight line racecourse with hazards, rollercoaster tunnels and bottomless pits, because that is what the 2d games did, but I always thought they should have gone the opposite direction entirely, something like a blend of carmageddon, motocross madness and tony hawk's. The game world wouldn't be contrived to recreate the rules of an ancient 2d game, it would simply exist around you and your goal is to find the best line through it.
I don't know if the technology or even the experience was there at the time to make that idea a reality.The actual game world would have had to have been immense, probably bigger than modern open world games. But 3d terrain engines existed back then. You could fit several hundred battlezone maps on a single CD, which would have been about big enough. At the time, these were actually quite fun just to fly around in, because the physics were really nice. The tricky part would be to stream them seamlessly. I suppose the closest paradigm would have been a flight sim engine, only for this one you would be (mostly) on ground level. So... a 'ground' sim engine? Imagine having a whole planet to run around!
I think all of the potential ingredients existed at the time, but was it a case of no one thought about doing it that way, or would it have been far too ambitious?
Sorry for the rambling, I was just trying to place myself in an alternate timeline where SEGA never crashed and burned and 3d Sonic games were actually fun to play...