I don't see a reason why they should step away from the sim-like handling. Forza has built itself a reputation of a (more or less) realistic driving simulator. It would disappoint many people if they would go into the direction of GRID, NFS Shift, Blur, etc.
The "community gameplay" video scared me however.
I don't think it's actual gameplay, but the way how the cars moved in this video... it's just wrong, edited or not. And this leaves some doubts about what to expect from the final product. Maybe they'll ruin it like polyphony ruined GT4, but i don't think so.
GT5 needs a rival, which will be Forza 3 most likely, and not some arcade racing game.