I too wish that sidestepping - true sidestepping - was implemented in Dead or Alive 4. It's a reason you see many people enjoy Dead or Alive 3.1 - not because it has a perfect sidestepping system, but many feel it's the closest that Dead or Alive has ever gotten to it.
I really have no idea as to why a true sidestepping system has been implemented. However, here are some facts to consider:
(1) If a true sidestepping system were implemented then the FreeStepDodge system would have to be fully revamped. The engine just doesn't have a "step" sway like that of Tekken or Virtua Fighter. The Z-axis of each hitboxes would have to be altered as another option to provide the huge hitbox avoidance of the character's body. In short, it basically needs to be revamped.
(2) This is one thing I've always disliked about 3D fighting games. They focus on the 3D aspect which typically revolves around avoiding "danger zones" (for a common term), but never really evolves much on the characters physically attacking each other. Typically it's an environmental game that causes it. This is contrasted in games like Street Fighter, where you control space not by "avoiding" the players attack, but by putting "obstacles" on the field of play. These obstacles I'm referring to are the special moves such as the "Hadouken" and "Sonic Boom". These are things in the gameplay that force the other player to react to it, and the player placing these obstacles on the field can win without ever physically touching their opponent. A 3D fighter typically doesn't revolve around this similar system. The sidestep always is meant as a tool to avoid the attack, but the players typically have to get back in to do damage. This is also typically the reason as to why 3D fighters are, generally speaking, slower in terms of move speed. Where most 2D fighters are 1-3 frames until hit frame, 3D fighters generally are of the 10+ frames until hit frame. The decreased speed provides easier methods to which avoid the attack and punish the attack itself. This is lends itself into DOA where players would attempt to "avoid" the most commonly spammable attacks, such as Ayane's
p:9 to avoid wake-up, high crush attacks like Gen Fu's
p
k, or even invulnerability frames to provide an option select such as Hitomi's
6:k.
(3) Itagaki told me himself that he "took sidestepping too far in Dead or Alive 3.1" and that he "attempts to reach that level without going that far". This was at least shown in the jump from DOA4.0 to DOA4.1, where sidestepping was increased. Personally, the main reason he said that was because of the Hayate cartwheel abuse that became possible. With some refining or changing to the FSD engine they could potentially make it that way. As it is right now, I have no clue to what Hayasi's take on sidestepping in the Dead or Alive universe. Especially since he hasn't done anything but rehashes since he came into power at Team NINJA.