As ridiculous as it may sound I would actually love to see this. Given Miyazaki's very unique perspective and From's ability to craft fantastic and intriguing worlds, a sci-fi game from them I'd be interested to see.
This could work indeed.
Personally I've been fantasizing about a Souls style game set in a 70's/80's post-apocalyptic urban setting akin to those found in The Warriors, Escape from New York, Blade Runner, Escape from Precinct 13, Michael Jackson's Bad clip, and some of the Batman movies and games. In short: think Bloodborne meets Double Dragon 2.
Imagine a game where you roam desolate, labyrinthian streets and alleys where flickering neon signs give off a vaguely warm glow, where steam comes out of manhole covers to obscure threats, and where garbage cans and broken cars litter the streets that could offer valuables or hiding places (or even bonfires functionally with regards to the cars). You'd be fighting corrupt, almost monstrously efficient, inhuman looking police officers as well as intimidating gangs of drugged up street punks that have mutated into grotesque forms and proportions (similar to the enemy hunters in Bloodborne) while using 2x4's, pipes, bricks, knives, machetes, chains and other such street fighting tools. Instead of herbs, estus flasks or blood vials, you'd use fictional drugs and perhaps even bodily implants to heal and enhance your abilities.
Souls / blood echoes would be replaced by something more literal, like old fashioned money, or something symbolic like respect or honour points. (Or by blood again if we're talking about a direct sequel to Bloodborne.) While hand-to-hand combat and martial arts would form the backbone of the fighting, the overall combat would remain similar to the Souls games in terms of its overall pace and animation - though it would follow Bloodborne's example a bit more with its larger focus on quick attacks and dodging instead of shields. "Armor" would come in the form of typical 80's gang outfits - think Terry Bogard's outfit as an example. Magic and long ranged combat would be replaced by guns again (though ammo would be quite rare still) and drugged fueled, martial arts inspired special moves akin to those found in fighting games (like using Ki energy to shoot a fireball). Classes could be things like Brawler, Rogue cop, Detective, Punk, Spiritualist, or Addict.
I think such a game would be fantastic because it (A) would be a logical chronological follow-up to the Medieval Dark Fantasy setting of the Souls games and the Gothic / Victorian setting of Bloodborne in terms of the time period, (B) would use a setting that is currently quite underused and that is thus ripe for reinvention in a way, and (C) because it would bring together FROM's trademark gameplay loop, design and combat with my favorite beat 'm ups of old such as Double Dragon, Streets of Rage and Final Fight (games that to me are long overdue for a big return in terms of their setting and street brawling action).
A man can dream...
Edit: Oh, and don't get me wrong: a new Otogi, Metal Wolf Chaos or Tenchu style ninja stealth game would be incredible as well! As would remasters of any of those.