There are at least three reasons why Canon will release a 1Ds MkIII when it is ready, and not sit on it.
1. Upgrade sales. Many owners of the 1DsMkII will upgrade to a MkIII. (Michael Reichmann will almost surely be one of them!)
2. Higher price and profits for higher performance. The MkII will probably be distinctly better in some significant ways (resolution frame rate, Live View?) and yet cost no more to make, and indeed a new sensor with new fab. methods might even cost a bit less to make than the current one. This would allow the 1Ds MkIII to sell at a higher price and higher profit margin. I would not by be too surprised if the MkIII debuts as the same US$8,000 as the previous two versions did.
3. There is _some_ competition. It strikes me as an over-simplfication to say that the 1Ds has no competition, in the sense than no potential 1Ds customer will ever instead choose a less expensive alternative whose performance is inferior but close enough that the savings are worth it. For some to whom high resolution is the main advantage of a 1Ds, over other good DSLRs, the difference between the 1Ds at 16.5 MP, 5D at 12.7Mp and D2Xs at 12.4MP might not justify the extra thousands, while a jump to 20MP or beyond could tip the balance in favor of a 1Ds MkIII. And some who who want options of both high resolution and high frame rates (over 4fps) ina single camera might prefer a 1D MkIII or D2Xs over the 1Ds MkII, but prefer a 1Ds MkIII with a frame rate higher than 4fps (maybe with a high speed crop mode?) over all current options.