At this point in the story, I don't see how Ryo would even beat Longsun Zhao let alone kill him. Keep in mind that Lan-Di killed Iwao with little effort, a man who is supposed to be a very experienced martial artist. However, let's say he does manage to defeat him and is in a position to kill him. Again at this point in the story, it's still hard to really say.
On one hand, I remember Yu Suzuki stated that as the story went on he would give up his desire for vengeance in pursuit of a larger goal. Most likely having to do with the prophecy, mirrors, "Tentei", and Chiyou (assuming the latter is still part of the story). Then there was his fight with Chunyan in Shenmue II that said a lot about what kind of person Ryo is even as she would have no doubt killed him if given the opportunity.
On the other hand, there was a reason why Xiuying took him in when she allows very few people into her life. She sees the same darkness in Ryo that once corrupted her brother Ziming. Also like I have said in the past, Ryo may have learned about the Wude or how vengeance is wrong, but I don't think he has internalized them. If anything, he seems even more hellbent on getting his revenge. So once again, its really uncertain at this point in the story (especially considering we're not even at the halfway point).