I'm sure the writers and creators have ideas for lots of stories in their world. Generally a creator of a show and the writers have lots of ideas they believe they might not be able to make. They are not going to let a story being cancelled or believing they are only getting twelve episodes stop them from the creative process.
I think of Gargoyles, whose creator Greg Weisman to this day 18 years after the show first aired is still coming up with ideas for his universe, still developing the world and characters even if these future stories never see the light of day.
Also you will often hear about ideas for a show if it continued a plot or added characters that would have been adapted. For example if Spectacular Spider-man continued Scorpias would have shown up as would have Hob Goblin. Or the 2002 version of He-man continued Skellator would have taken over Eternia for half a season, Hordak would have been released and She Ra was going to appear.
Many cases of a show losing quality over their long life is due to a change in the writers and animators as the show keeps going. The creators and better writers move on to different shows leaving the new episodes in inferior hands. That's what happened with Spongebob, Dexter's Lab, The Simpsons, Ren and Stimpy to name a few.
Really there is nothing to fear about more Avatar as long as the creators and writers have more ideas for their show and universe and as long as the show is never handed down to less talented people.