Katzenberg is basically hoping that they can bank on Shrek gaining a "nostalgic" audience, since the first movie came out 13 years ago, and by the time they can crank out a Shrek 5 (remember: it's not even technically being made yet), the college audience will have mostly grown up with these movies. In short, he wants a "Toy Story 3".
Then again, Toy Story had a lotta goodwill with it and never ruined its reputation with audiences. This is a horrifically stupid idea, but that's just me.
As for Shrek 4D, Universal and Dreamworks lately have not been getting along, yet the film is getting renewed again and again for capacity reasons, and hey -- hard to believe, but it gets good consistent marks on the guest research surveys. It's by far the likeliest thing to be axed on the upper lot after Potter, but we're pretty much saddled with it... and this is going to be hard for some of you to swallow, but probably for the rest of the decade. So... yeah.