Barry did survive, you find that out in RE3. In one of the alternate endings, he comes to pull you out of the city in a chopper just before the bomb hits. He is also in one of the epilogue files.
As for Billy, I think capcom could easily fit him into the story line at this point. After he escaped with rebecca, she reported him dead. Though, keep in mind that this was before the virus broke out into the city. He couldn't afford to stick around, so he most likely fled the country. If he is as tactful as they lead you to believe in RE0, he would have fled to a foreign country, probably mexico. If that is so, they would just need to have another outbreak of the parasite in mexico, in which Billy and a female protagonist must escape, and do their best to put an end to the nightmare, Though I doubt that they would end the entire series with Billy as the hero. That would build suspense, though, because the outbreaks occur just outside the us boarders.
Personally, I think Barry should be the next main character. Him and Rebecca. Capcom has ignored them for far too long.
