Well, ... It should be fairly easy to piece together. There was a wormhole that sent him to a different universe, that universe was the Shouwaverse. Nothing too complicated.
It's not a retcon. In the last episode of the series, after Ultraman and Hayata are separated, Hayata says he doesn't remember anything that happened after the ball of light crashed into him.
I fear you may be overlooking a few things about Asuka's abduction into the Showaverse.
Some thoughts below:
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First, that wormhole that took him away from his friends was deliberately shut down before the Kraken could rescue him. That forced the remaining SuperGUTS members to report Asuka's loss to the TPC. The same TPC whose top intelligence officer had abused his authority to abduct and murder Asuka to steal the power of Dyna for his own use.
Second, after they reported the loss, and were mourning their lost comrade, they got a vision showing him alive, in human form, in his spaceship. But, there were disturbing signs that he was suffering from severe amnesia. And, that vision ended with Asuka re-uniting with his long-lost father in his spacecraft and flying away into the light at the end of the tunnel. Literally. One could be forgiven for them thinking that they're seeing him going to Heaven. Bittersweet comfort, that. Yet, two of the SuperGUTS members seem to think that he's headed toward the planet of the Ultramen, and the others seem to hope that Asuka will return. Granted, they had no chance of following him, and the only thing they could hope for is that he would be returned. Since that was the end of the show, we never saw it, of course.
Third, when we do see Asuka again, he clearly believes that he's still in his home universe, since he tells the Pendragon's crew that he'd been known on Earth as Ultraman Dyna. So, apparently, the GranSphere DID out him when it made its' threats. Yet, Asuka's Earth is not the Showa Earth. What is clearly apparent though, is that he has been fully-trained as an Ultraman. Dispatching both the Zetton* assassin and the space dragon** that had overwhelmed the talented Pendragon crew with ease, and transporting them to the Monster Graveyard, which is unknown in the Tiga universe. Plus, at the end of Ultra Galaxy Legend, he leaves with the Pendragon's crew, stating that he's still on a journey too. And, as the humans leave, we see that both Ultraman and Ultraman Mebius are very happy for them ...
Keep in mind that Asuka was extemely weak, if not slowly dying; when he finally returned to the Kraken. And then is too weak to fight the wormhole that took him away. That showed he needed advanced medical help that the human race couldn't give him, so his friends were saying "goodbye", believing he was on a suicide mission. And, he did get that help - immediately after the wormhole closed. And, we know that Ultramen handle wormholes like we handle doors. Plus, he'd clearly been transformed into a Gaia-type Ultraman, a human infused with the Light, without being possessed by an Ultraman.
Now, this is speculation on my part, but it seems obvious that somebody set it up that, one way or the other, Asuka would be removed from Earth and humanity. And the trigger for this was Gondou's attempted theft of Dyna's power - by murdering Shin Asuka. That started a series of attempts to convince SuperGUTS, and the rest of the TPC military, that Asuka was dead. First, Asuka was revived after Gondou's attack, then presumed dead again after the blast that destroyed the Sphere-possessed Ultraman "Terrannoid"***, leaving the morpher behind. Forcing SuperGUTS, for the first time, to fight on their own ... (And not very well.. ) However, Asuka has been transported to where the only two members of GUTS in civilian life would care for him. But that attempt to hide him failed, and Yumimura was taking him home, having returned his morpher to him. So, when Asuka and SuperGUTS destroyed the GranSphere, someone created that wormhole to snatch him, leaving the others behind. Yet that someone informed his friends that he was alive at the end, and would be loved - but he would not be returned to them. Not this time.
We know, from Ultra Galaxy Legend, that Ultras do not forgive those who steal their power of Light. Or even make the attempt ... Yet they love human beings greatly, using their own life forces to save them. One can only imagine how they would feel about a human who died because someone wanted their power ...
*Hmmm, the villain in the upcoming movie is called "HyperZetton". You don't suppose the Zettons are sending it to Earth to avenge the defeat of their first monster at the hands of the Science Patrol - and are hitting the wrong universe? Or, is it to avenge Asuka's execution of their assassin, by retaliating against Asuka's old teammates?
**Dyna watchers were probably amused that Asuka made sure to blow the space dragon to smithereens so that it couldn't regenerate into a bunch of micro-dragons. Which Gondou had chastised them for ... See episode 6: Two-Thousand Attacks.
***General "Frankenstein" Gondou called the Ultraman he'd dug up, on Mars, Ultraman Terrannoid. Shouldn't he have called it, Ultraman Marsian?[/HIDE]
As far as Shin Hayata's situation goes, it was stated in an earlier version of that final episode that Shin was still holding the Beta Capsule, and was awaiting Ultraman's return. As a matter of fact, that version had it that Ultraman had to return, so he could keep Shin alive, since Zoffy's artificial life was a short-term solution to the problem ...
Finally, we know that at least two Showa Ultraman hosts willingly emigrated to Ultra, even though Legend states that the light there is too strong for ordinary humans. There's probably a nice little shielded community for humans on Ultra for retired Ultraman hosts. Maybe that's where Shin Asuka was all this time?
Perhaps it's time for the human/Ultraman relationship to take the next step. Instead of just having Ultras visit Earth, have some humans visit Ultra, set up diplomatic relations, trade agreements, that sort of thing. If nothing else, it would be a fitting and optimistic end to the Ultra series.
And finally, when he did appear, we don't even get a hint of what happened to him, or how he survived the end of his own show!
