Yeah, this topic is confusing.
3D isometric seems like kind of a misnomer, to me. Isometric originally referred to how they would give the illusion of a 3-dimensional space in those sprite-based RPGs and other games. (I'm playing XCom at the moment - it uses the same thing.) The camera is overhead, the method they used to depict height and depth was isometric (which just means that sprites are represented from a 3/4 quarter view instead of directly overhead.) I understand that nowadays people use isometric in regards to videogames as any camera angle that's used to simulate that same type of gameplay (Diablo 3, for example.) But it gets confusing if we're trying to decide whether we're talking about making a sprite-based 2-dimensional game (like Fallout 1) or a fully 3-d rendered game that just happens to have an overhead camera.
These days, it just seems simpler to do everything in full 3D as opposed to 2D sprites, especially for a game like Fallout, XCom, Diablo, etc. Fallout and Diablo, for example, used sprites that were built with renders of 3D models and then translated into a sprite format. At the time, it actually was a technical limitation - I would imagine that if computers at the time could have handled a fully 3D world with the level of detail they wanted in the game, that they would have gone that route instead of taking the extra step of rendering all the models into 2D sprites. If they could have made Fallout 1 look as detailed as it did with all 3D models, they likely would have done it that way (computers at the time would have had a lot of trouble managing all that, though.)
These days, unless you're going specifically for a hand-drawn aesthetic, I don't see much point in making a 2D game as opposed to 3D. Isometric worked very well for a sprite-based game like Fallout 1.
But if we're going to have a fully 3D game world, I think the "isometric" camera angle is a bit limiting. I'd just as soon have that overhead angle as a base, but with more of a free cam so that I can view the action from any angle I want. I think the type of camera used also ties a great deal into the type of game you're going to be making. I'm not such a fan of RTS-style games these days. For myself, if I'm going to have heated real-time action I'd just as soon do it in third-person with a camera fixed behind my character (a la Fallout 3.) It cuts down, for me, on the number of variables I have to worry about.
For a turn-based game, however, I'd just as soon have a free cam with an interface more like Fallout 1. Diablo is sort of one of those exceptions to my own preferences - having too much control over the camera is something I'm not going to be needing in that game - an "isometric" angle works very well for that sort of gameplay. But again, if we were going to have a Fallout more in-line with the type of interface of Fallout 1, then I'd rather have a freely customizable camera to choose my own angles rather than one that's fixed at one angle. (And I haven't been following Diablo 3's development too closely, but they might have something similar as well.)