Unless these first translations are not accurate, I would say this was a fairly big letdown. A couple of thoughts:
1 - If he did say that Shenmue HD is not even being worked on, then we have been duped again by countless dumb rumors and that guy at Sega is really a jerk for saying that it was coming.
2 - Since he has continually said in the past that the story would only be coming out in games, I think it is a REALLY bad sign that he has now changed his mind and may tell the story in manga or anime. This could be the worst news of this show....
3 - If he is not currently working on Shenmue III, then what IS he working on? We haven't heard anything? Everywhere he goes, people only want to know about Shenmue. I just don't understand why he would work on anything else at this point.