Well, in the article I wrote on it for the site I write for, this is what I said about reason's FOR it to be a DLC:
The "In My Time of Need" was one of the few quests that offered something more that could happen later without delivering yet. Much like the 'Eye of Magnus', it's a story that has the possibility to connect with a future storyline.
It offers something different than what we've seen from other DLC's. We've had vampires, falmer, now we've had more dragonpriests/dragonborn stuff, always a little more dwemer stuff, and have spent plenty of time in the north (and snow and cold). This would take us to the opposite corner of the map and dealing with people we've had little interaction with. New lands, new people, new toys, etc.
It would also offer what I think they are looking for, especially with the PS3 problems, a new load area like Solstheim was. Not to mention those areas could easily be cut off from the rest of Hammerfell by mountainous terrain, so it's not like they'd have to offer up much more size than what we got with Solstheim.
Dragonstar (and the neighboring Dragon Gate), which is the rumored area, might easily have some connection to the whole ongoing plot dealing with dragons.
The Redguard/Hammerfell played a very different role in the war with the Thalmor and Empire than anywhere else and could offer additional story dealing with Thalmor issues and a new angle.
To those saying Redguard isn't a great name for a DLC and was already used - I don't think that matters. Most casuals (the main market to consider when marketing ) don't know of the Redguard game. Look at casual gamers when you think about things like that, don't consider us. We will buy it if it's labeled the Land of Buttmunchers. The names aren't for us, they are for casuals. Catchy, easy to remember, trigger something familiar with the game: If people had casually played Skryim before. All the DLC's are catchy, one world descriptors: Dawnguard, Hearthfire, Dragonborn - Redguard would fit right in.
And obviously the thing that started the rumors is the copyright. It was registered before Skyrim came out, so that is different than the others - but that could also mean it was one of the earlier ideas for a DLC, especially considering 'Time of Need' is a very early side quest. Also, as Tyrone pointed out, it was registered in the same categories as previous DLC's "as downloadable game software".
But we really won't have a better idea until a patch comes along that someone strips code out of again. At this point though, and without any other copyrights registered and the knowledge they are already working on future DLC, it's a good possibility.