I think it's extremely unlikely we will see a Shenmue III featuring Ryo Hazuki. Not impossible, but unlikely. Sega will have to be rolling in cash and Yu Suzuki would have to be buddy-buddy with Sega again, both not impossible but both unlikely. Not often you see a game company hit the bottom like Sega did and come back to making consoles down the line and enough capital to throw out a project like this again. Since Shenmue we have had a huge rise in MMORPGs which are similiar to Shenmue in that you spend a lot of time in a big place doing things that bore most people but a select group go nuts over. This crowd likely would have played Shenmue on the Dreamcast but once DSL got to their house and their computer could run WoW they likely would have dropped it fast. If we are lucky and good little boys and girls we could get a spiritual successor like BioShock is to System Shock 2. Obviously it would be less of a proper successor than BioShock is due to the story of Ryo chasing down Lan Di being part of the Shenmue saga and you'd have to have your own story without breaking those pesky copyright laws.
As I said, for a sequel to actually make it pass focus groups it would have to trow all redudant gameplay through the window. To be honest that wouldnt be such a tragedy: shenmue was mostly lineal, not a sandbox (even when it was bigger and more detailed than most sandbox games of that generation) and the player was forced to do meaningless crap most of the time just to get to the beef of the action. Back then seeing detailed people walking through the street and being able to talk to them was amazing, now its common fare and even boring. A remake of the first 2 without all the "filling" could be released and might sell more than before.
According to a reliable source, the new Shenmue project is being co-developed in a collaboration between SunSoft and Yu Suzuki's new studio - YS Net - which is claimed to be completely independent from Sega. Does that mean Sega no longer has any interest in taking the Shenmue franchise further and has given Suzuki back the rights to the series as a result? Whatever the case, Suzuki has made the promise of "compelling visuals" so at least he's not appearing to have let his normally high standards slip. If he really does intend to make further Shenmue sequels outside of Sega, maybe he could finally close the deal that made Shenmue II exclusive to Xbox in the US and get funding to complete the story with the kind of large budget it deserves as a Microsoft Game Studios member...