You cannot stretch it that way, not unless you went into the games files and added support for higher resolutions. Sorry, but that is the only way to use a higher resolution. Diablo II was written before the times of Widescreens, and Flat Panel, so it's support options for higher displays is not there. It was written using support for a DirectX version that only supported 800x600 as a maximum resolution.
Your basically trying to take a game like Duke Nukem 3D , and make it compatible to run at 1024x768.