Well, my initial reaction was "This would have been amazing, go to hell Sega" but then I actually read the article and watched the video, and whilst this is a respectable update that looks quite decent, I'm seeing something lost in translation here, as in the original feel of "Shenmue", that intangible Yu Suzuki/AM2 immersive and beautiful magic that made us fall in love with the games in the first place, not being there in this prototype build. As though the essence of Shenmue is lost. So my reaction changed a little from being incredibly disappointed and sad to slightly relieved? The ports we have are the real Shenmue, entirely in-tact from 1999/2001 and as has been said this would have been torn to shreds by the mass market. Unfortunately in the modern games industry you either go hard or go home nowadays, so either Yakuza Kiwami/Resident Evil 2 with the ridiculous budget behind them or gamers will just complain and blast the product in to the stratosphere. The point I'm making is however sad this is in a "what could have been" way, without Sega Japan/AM2 and Yu Suzuki returning to the helm this project could have immensely backfired, and that being said I'm starting to understand the potential reasons for its cancellation.
Given the Shenmue HD that we did get sold so well, a feat likely to be repeated or exceeded by Shenmue 3, I'm sure we'll see more Shenmue down the line, whether it be full-on Kiwami style remakes or at the very least Shenmue 4 from YSNet. So this isn't the end of the road, nor is it the end of the world. I also really do feel for D3T now and the response they received, given this was the hidden truth to their ambitions and love for the games behind the scenes.
We still have Shenmue 3 and very probably 4, and something tells me this won't be the last we hear from this particular idea either, dependent on how Yu Suzuki's sequels do. The series still has a bright and positive future.