After that awful first game, who'd want a sequel anyway?! I kid. :>
Anyway, Phil Fish, the guy who made Fez is kind of a douchebag, one of the guys @ Gametrailers, Marcus Beer, called him out for his attitude toward the press, Phil told Marcus to kill himself, raged on twitter, then rage-quit and said he's canceling Fez 2, then Polytron announced on twitter that "It's with a heavy heart that we announce that FEZ II has been cancelled and is no longer in development. We apologize for the disappointment". So there you have it.
Normally when people bitch at developers over things, it's along the lines of "Argh, ME3 ending was bad, I hate you" or "Argh, you nerfed x y & z in the game and I hate you cause I loved abusing it", or the basic developer vision for the game didn't align perfectly with the fans. Phil had a successful game in Fez that most people loved/liked, but his personality, attitude and hateful chatter towards everything/everyone became a lightning rod for negative attention. He basically brought it on himself, then acted like the world hated him, and as a result we get the rage quit on Fez II, so long Phil, seek help.