I would love to see an otome or homo game from Key, the potential is definitively there (I’m not sure about Masato, but I could totally imagine Kyousuke and Kengo doing perfectly fine in an otomo game without having to change anything about their personality). But, this would be a very risky move in terms of business when they have only targeted straight males so far. I would fell from my chair if they ever happen to announce a game targeted at another category of people.
As for being able to select the protagonist’s gender, it’s an interesting idea, but it comes with one more problem: it would actually complicate a lot of things in the writing process. Either you don’t include any element referring to the protagonist gender (but for a romance story, that would probably be very awkward), or you double the work for a lot of scenes. The writers are known to be paid per line, which is why the games are so damn long, but then the game would be more or less half shorter for as much work and cost. And you would also need double amounts of CG and artwork for any representation of the protagonist.
So, a cool idea, but which would come with heavy costs for projects as big as the Key games. It’s more something people should try for the Nanoreno or a small project.