If Menard's can get access to steam locomotive tooling at the right price, I think you'll see a Menard's steam locomotive.
Right, the key is tooling. The O-gauge crowd probably wouldn't embrace a plastic-bodied loco, and new tooling for a die-cast metal one is cost-prohibitive. Somehow Menards would have to negotiate use of tooling that already exists.
A while ago, I read speculation that RMT was going to bring back the Marx / K-Line "333" Pacific; so far they haven't. This is a smallish, but handsome loco last issued by Lionel circa 2009. Another "O27" choice might be the Lionel modified "Prairie" 2-6-4 which last appeared as part of the Conventional Classics series circa 2010.
It would be fun and nostalgic to see one of these return to production, as long as the quality and operation aren't undermined by severe cost-cutting. My $.02.