I'm just going to say this: It's not gonna happen.
No amount of hope, rumors and speculation is going to change how Diablo works. No, it would not work with a controller, no matter how much people might want to believe that it would. It would be far, far too clunky and limited for the needs of the game. Pinpoint accuracy is required for shooting off specific spells (Frozen Orb, Traps, Fireballs, etc.) and especially for teleporting, as stated above. The ONLY way that this could work is if it was still designed to be used with a mouse and keyboard, but then anyone without a PC would have to go out and buy a set just to play this game. The only way this wouldn't piss the general public off is if the game came bundled with both of those things in 1 box and even then, it would be extremely awkward to hold a mouse and keyboard for most people without the use of a properly placed table or the use of a desk. Using a mouse and keyboard in your lap just isn't going to be all that effective. Aside from bundling the game with a mouse and keyboard, the game would have to be altered a whole lot and would lose some of it's flare from the PVP element due to the controls. I've been a huge console gamer for over 20 years, but I love PC gaming all the same.
In short, you're a console gamer and you want to play Diablo 3, maybe it's time to suck it up and give PC gaming a try. It's really not all that different and in most cases, you can even use a console controller to play PC games, although it's not necessarily as effective in every case.
I'm very excited for Diablo 3, despite how short my spurts with the game truly last. The Diablo series is the kind of thing that I can get back into 1-2 times each and every year for between 2-12 weeks, depending on how hard I get the itch to play. I build characters, make them godly, help friends out, PVP a small amount and then quit. If Diablo 3 can keep me coming back for these small bouts of excitement the same way that Diablo and Diablo 2 do, I most certainly doubt that I'll ever even go back to Diablo 1 or 2 ever again. That depends on the classes and overall game length.