We already knew the story was heading to a less open world state, so I don't think that will be a problem. The chances of this ever coming out in 2017 were slim anyway, so no surprise if it does slip back to mid 2018 - any later and I think it might start hitting some real criticism from the media and fans.
I'm confident it will be out though as they have a team of experienced developers and the backing of Yu, Sony and to some extent, Sega. If it didn't come out, I can see the backlash hurting all of them and it probably being the end of Shenmue. I think the main issue this whole game has had is translational really. Yu seems to have a different approach to game design and although it's interesting, the terminology and structure is different to what we're used to seeing. My only real concern (it's minor) is the character models so far. Everything else has been as expected, but they really seem to be struggling with capturing the look of Ryo.
The lack of an update at E3 doesn't really bother me as it would require a seperate build being made for the media resulting in less money and time for the final product. Plus, it's not like they're being silent of the development of Shenmue 3 anyway.