Why would they make an A320 style aircraft? DC-9 derivatives are perfectly capable with the right upgrades and marketing. A twin is a bigger issue, but I suspect the question is where are development funds going to come from? I'm seeing this as the MD-11 in name and time-frame but sized closer to a DC-10. Engines and wing should be suitable, reworking CG and tail I'm honestly not sure of how amenable the platform would be to it; definitely possible, but I'm thinking it's going to be a lot more expensive than OTL's aircraft. Ideal would, imo, be an MD that has the money to do both, the twin and tri, with two lengths in each, essentially developing an airbus (no caps, the European big short range concept) a long range twin, OTL's MD-11 and OTL's MD-12 trijet further stretch of the 11. That said, the issue boils down in my head to a version of MD that wants to do that is unlikely to have the funds, while one that DOES have the funds is liable to build the twin and the MD-12 A380 like double decker, which looks good but seems likely to sink the company with high costs, slow development and low sales... Definitely interesting what could happen though if you've got a 777 sized trijet a few years early, a true 747 replacement (passenger market anyway) with three engines in the wings and MD actively fighting early ETOPS certifications for Boeing. That said, I guess the Boeing merger is liable to be more equal if the MD-12 is flying around as an almost replacement for the 747, and there is a lot more incentive to keep the DC-10 derived stuff around with a big twin the trijet being more 777 equivalent... At the same time, this family kicking around makes me wonder if the 777 will actually be launched rather than a "safer" path with the 747 stretches and a heavier emphasis on an earlier 767-400.
So, short version? Give MD a bunch of capital and get it in their heads that a twin jet is at least as important as OTL's MD-11. Longer is that even that might not be enough, but it should at least get a more viable product, and make the whole environment far more complicated.
PS: I was trying to recall what else Boeing might have done in that timeline and remembered the 7J7... I wonder how thing go for a Boeing that pushes the 757 more heavily, possibly even launching the 100 with smaller engines (shrinks are never great economically, but a short body 757 with CFM56s doesn't sound terrible, shades of the A318 or no) and mostly replaces the 737 with the unducted fan instead of launching OTL's 777.