There seems to be a common misconception that isometric 3D somehow isn't
"real" 3D. That is not true. Isometric projection uses a full three
dimensional coordinate system. The only difference is that it uses an
orthogonal projection instead of the usual perspective one with a
vanishing point.
Being able to freely rotate the camera (which isometric engines usually
don't allow) isn't really a requirement for 3D IMHO.
It is true that isometric engines often use a 2D rendering engine for
displaying the projection - but then again this is pretty irrelevant
from a user's point of view. What does the player care whether the
rendering primitive used is a rectangle or a triangle?
regards,
Sören