Warner Bros. really wants to build up their DC Comics brand and giving up on Green Lantern doesn't do that.
Not necessarily. They could just do a different hero. Perhaps a certain Scarlet Speedster who's been said to be in development but has been sidetracked for years?
* The CGI rendered models which made the first movie costlier (CGI suits of Hal Jordan and CGI models of Sinestro, Kilowog, Tomar Re, Guardians, CGI design of Oa, etc.) are already with them, so for GL 2 they will not be starting from scratch, which enables then to save money and time.
This is assuming there will be absolutely nothing new in the next film. Which is completely unlikely.
* Unlike Superman Returns where major hurdle was finding a way to get around the "super kid" problem, the sequel to GL can go in many directions and they can introduce John Stewart and make Hal Jordan as a cameo.
Also, if John Stewart is the hero of the next film, they WOULD need to design a new suit. Since it's a different character. And if they go in 'many different directions', they would obviously need more money.
Also, completely changing the lead from the first film to the next and having the previous lead as a cameo completely defeats the purpose of having him star in the first film. Because you'd be following up an origin story....WITH AN ORIGIN STORY.
Plus, why would WB want to give a sequel to a film that won't make it's budget back, and was a critical failure? They didn't give Batman and Robin a sequel, and it actually made a profit.
If WB won't give a sequel to a crappy movie that actually made profits, why would they give money to one that didn't? Even TF2 made money.
The 'it'll fix it's flaws' argument is dumb too. By that logic, they should make a sequel to Catwoman, so they can fix it's problems in the sequel!