It is a cool idea, one that many of us have thought of, but it would be very difficult to do, as stated above. Rockstar puts so much effort into its games, so much research on the areas it uses, that it would take forever to make such a game that would still have as interesting a world as 4.
I suppose the main reason to having an entire circular planet would be that you could drive/fly one direction and eventually end up in the same place again (the reason I thought of it). In such a case, they could "loop" the map, its a cheap move, maybe, but if you fly due east and leave the island, after a few minutes maybe you would see the west side of the island on the horizon.
Anyway, to make an entire planet, or several planets (whats the point of having just one?) would take so long, technology would outpace the game and the graphics would risk being far behind and not look good enough for many people to buy. Not to mention having to make a sequel to that kind of environment.
The only way it could work is for a HUGE hard drive/server, and a map editor, but then you'd probably have a bunch of crappy cities made by people (though some would be cool). Still, I'd like to see a map editor and building editor (change shapes and textures). And due to copyright laws, none of these new cities would likely have their own radio stations, unless it was also user submitted songs (by garage bands), which I'm sure most would sound horrible (sorry bands!)