Vince Russo planned on doing this as a plot element to the Stacy Keibler pregnancy angle. She was seeing David Flair in the storyline, and was his fiance, so Russo planned to reveal that Stacy was Ric Flair's illegitimate daughter. Fortunately, WCW went out of business before this angle could come to fruition.
Vince McMahon of World Wrestling Entertainment has been trying to do an incest storyline going all the way back to 1999, when Ken Shamrock was supposed to be in love with his Kayfabe sister (Shamrock refused). Then Vince tried to have an incest storyline between himself and his real-life daughter, Stephanie (she refused); he countered by replacing himself with his son Shane (both of them refused). He finally got his incest storyline between Paul Burchill and his Kayfabe sister Katie Lea, although it never got past Incest Subtext. Note that his inability to get an incest story actually going didn't prevent him from alluding to such things.
Vince's attempts to do an incest storyline prior to the WWE going PG is most likely due to issues involving his screwed-up childhood. He unfortunately vents all these issues through storyline, instead of venting it to a psychiatrist like anybody else would. As Vince is someone whose blood would test positive for Kayfabe if such a thing was possible, it may be impossible to find out what really makes him tick.