Not only is Ubisoft hard at work on Red Steel 2, they're also busy securing the domain names for any future installments...if those should happen. Ubisoft now owns RedSteel3, RedSteel4, and RedSteel5.com. This obviously doesn't point to plans for any future games, but it doesn't rule them out either.
I say people grab up redsteel6.com and piss Ubisoft off. Boy that will be an interesting story to read.
Looks like Ubisoft is really planning for the future. Like some old, smelly, hobo-throwing-spent-heroin-needles used to say, don't count your chickens before they hatch.