The fued shouldn't start with Sting outright challenging Undertaker at Wrestlmania, because that would be ridiculous. You can't have Sting coming to WWE and made out as if he only came to WWE to beat Taker's streak. It needs to be built a litte.
How I would do it is, at Elimination Chamber have Undertaker make his reuturn by coming to the ring and cutting a promo on Wade Barrett, Corre come out and confront Taker with them surrounding the ring and attacking him. Suddenly the lights go out and Sting is in the ring holding his bat, and attacks the Corre members giving Undertaker some time to get back up and take the remainder of the members out. Then Sting and Undertaker are left in the ring staring at each other, as the show goes off air.
On Raw the next night, Sting opens the show by cutting a promo, saying that he's been watching both Nexus and Corre for a while now. He then recietes a brief history of how he's seen stables like these throughout his career, reminding people of how he fought against the Four Horsemen and NWO, and how he's come stop them. He's then interrupted by Undertaker who comes to the ring, and they both have a staredown. Similiar to Hogan/Rock's staredown, except they won't be looking at the audience. Undertaker starts talking about his brief history with his brother Kane, and reminds everyone of how he was betrayed by him, but that it was Wade who buried him alive. He talks getting revenge on both Nexus and Corre since both stables have members who took part in burying Taker, and then warns everyone including Sting to stay out of his way. Suddenly the Raw GM's alarm goes off and Micheal Coles goes to the podium, he then says that both Undertaker and Sting will work together that night, when Sting and Undertaker take on Wade Barret and CM Punk in a tag match. This could also allow CM Punk and Wade Barrett as leader of Corre/Nexus to start a rivalry between the two stables, since Nexus will proberly take on Corre at Wrestlmania.
The tag match takes place with both Corre and Nexus surrounding the ring. But before the match starts the GM's alarm goes off and says that both Corre and Nexus must vacate the ring area, leaving just Sting/Taker Vs Wade/Punk. The match takes place with Sting/Taker getting the victory. But Nexus/Corre come back out and attack Taker/Sting, but then Randy Orton, Big Show and maybe some other wrestlers comes out to stop them. The ring is cleared out with Sting and Taker getting back to their feet, but suddenly Taker chokeslams Sting, quite like when Taker chokeslammed Cena last year, and the show goes off air
On Smackdown, Undertaker cuts a promo on Corre again, Corre interrupt Undertaker saying that they put Taker out once, the next time they'll do it permenantly. Undertaker challenges Wade to a match that night. Undertaker and Wade face off, but Taker is soon attacked by Corre and overpowered. Lights go out again and Sting appears in the ring and like EC, attacks Corre and clears out the ring, then as retalitation for Taker chokeslamming him, he attacks Taker too, and then cuts a promo on Taker saying, how he and Taker are very much a like, but not in a good way, eluding to the fact that Taker and Sting are loner types and can't work together. He then says that he will continue to fight Nexus/Corre whether Taker likes it or not.
On Raw, CM Punk and Nexus are cutting a promo, when the camera shows Sting in the rafters. Punk says he's not afraid of Sting, and claims Sting is a coward for hiding in the rafters like a scared child, and challenges Sting, but before the made official, Randy Orton interupts Punk since they both have beef and looks like Punk will face Orton at Mania, maybe. A match is made between Punk and Orton instead by the GM, and Sting will be special guest, the lights start to flicker through the match and Punk starts blaming Sting for it, then suddenly the titantron shows Undertaker attacking David Otunga backstage, since Orunga was one of the guys who buried Taker alive. With the distraction, Orton RKO's punk to pick up the win. The Rest of Nexus come down to the ring but Sting and Orton are in the ring waiting them. They're shown on the entrance ramp bewildered at the current situation. Undertaker then comes out to the ramp with Otunga, and sends a message to everyone by giving Otunga a Thombstone on the ramp. Both Sting and Orton and shown in the ring staring at Taker, but before Taker can leave, the GM interrupts and makes a match next week on Raw between Taker and Sting, and it will be a Lumberjack match with all members of Corre and Nexus as the lumberjacks.
Anyway, i'm not going to go on. Just that I believe something like that could work. Although I'm not sure if people would agree with that path.