If Sega confirmed that SIII will never happen, which they won't, then I ca see Suzuki finding another way to bring closure to his story, but Sega owns the IP, and there is really no benefit in dropping it. At least in its current state, the Shenmue franchise is still open and can be pursued if Sega sees fit. The only thing they would achieve by saying that SIII will never happen is closing doors on a potential money-making franchise.
No word on Shenmue is better than no Shenmue at all, for both us and Sega.