Really the only way to do Shrek 5 is make it a Toy Story 3-esque send-off to the character or something in the vein of The Last Wish. Maybe even make it a potshot at Disney's live-action remakes with Shrek and others solving a scheme that involves replacing fairy tale characters with nightmarish clones of them.
Dreamworks has gone on to have numerous other IPs and the character is pretty much a joke now anyway.