The last testnet reset was for the current testnet3 back in 2012 (not including segnet which was a testnet for SegWit before SegWit was activated on mainnet). Are we due another testnet reset? Or is there no need for testnet anymore with the introduction of Signet?

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I don't think there is a clear answer to this yet. I suspect many are waiting to see whether Signet proves an effective replacement for testnet. (Signet is not yet merged into Bitcoin Core as of the time of writing in August 2020.)

There has been discussion on the Bitcoin dev mailing list and in the Bitcoin Core repo about a testnet reset at multiple points.

There are various problems with testnet of which many are addressed with the introduction of Signet. Testnet coins are supposed to be for testing and are not supposed to have any value. However, the hash rate directed towards the testnet chain fluctuates and at some points the difficulty of mining a block is much higher than you would expect for a coin that is supposed to have no value. This also means that the variance of block discovery time is wildly different to the average ten minutes on mainnet. (At one point 16,000 blocks were found in one day.) It is difficult to know what is happening during these fluctuations. It may just be that the testing of one application (e.g. a new ASIC manufacturer) is inadvertently disrupting the testing of other applications.

Signet resolves this by introducing centralized control over when and how regularly blocks are mined. Newly mined blocks need to be signed by at least one authority to be added to the blockchain. For some use cases (e.g. testing the latest Taproot scripts) it will be a relief to not have to deal with wildly fluctuating block times. However, for other use cases such as mining, IBD (initial block download), P2P etc this artificial stability may not provide the desired staging ground before moving to mainnet.

It is possible to simulate a block generation policy similar to mainnet on Signet or combine proof of work with centralized signing. However, I suspect that for a limited set of use cases a totally unrestrained, open and permissionless testnet will still be required. Hence once the dust settles, Signet is merged into Bitcoin Core and we have explored to what degree Signet meets the testing needs of all the various applications I think we will still require a new testnet reset. But I can't predict the future and others may disagree!

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