That might very well be the case but I find it a nice touch to think that he gave it away to let it get polished up before giving it to Ryo. Maybe he hoped to at least live long enough to see the day that Ryo turn's 18.
Who knows what really was on Iwao's mind. I still find it kinda mystifying that he knew someone was coming for him soon and that he didn't try to fend off the attack by calling for help or something. Maybe he didn't want to do that because he felt like he deserved it or something? But then again he seems to be surprised who Lan Di actually is.
Still so many mysteries surrounding Iwaos death...
Another thing came to my mind. Does the phone number that can be seen in What's Shenmue at the covered building adjacent to the Nex Yokosuka Cinema and across Shinikichi's place (0468 61 5621) actually have any purpose?
There is no acessible phone in What's Shenmue and it doesn't give you anything in Shenmue, not even the Japanese version. Maybe back in 1999 you could call it in real life for some info about the game or something?
Or maybe it's just athentic decoration...
It would've definately been nice if you got some message in the final Japanese game like "Thanks for playing What's Shenmue" or some other little bonus stuff when you call that number.