I have heard this. I was at a panel when Bruce Timm commented on it and said that , yes there was to be an offspring from a Bruce/Selina pairing that might have been a Huntress, but the rest was crap. so Dunno.
Personally, I think the story just works SO much better without a direct connection to Bruce. Terry beats the Joker...by being himself and NOT playing it the way Bruce would. In the end Terry carried on the legacy without the type of whimpering sock that DG or a direct offspring would have.
There is an easter egg on the season one dvd that lets you see the original artwork for the project when it was called "TomorowKnight", and had a direct offspring and the all the villians were based on the originals (Joker jr.) ect. The team rightly tossed it all out and put much more time between the end of Brices carrier and the start of Terry's.