I think this is a smart move. Billy will make a lot of money because:
1.) People visit NYC all year round. If they make a special trip to see the Statue of Liberty or a big Broadway show, they'll go see Billy Joel at MSG as an authentic New York experience.
2.) There's quite a few of these residencies in Vegas (Britney, Motley Crue, Elton John, Cher, Garth Brooks, Celene Dion). For now, on the east coast, he has a monopoly.
Whether he has released any new music recently is irrelevant. The Rolling Stones and Paul McCartney release new music, too. But when they play big shows, it's 90% big hits.
However, I read an interview with him and he said he's sick of just playing "the hits." (s I'm sure all classic rock artists of his generation are.) He said that if he were to tour again, he'd try to do the "play a classic album in its entirety" thing to play some rarer stuff. I don't think this residency will allow him to do that. I assume there are going to be tourist prices for these shows and they are going to want to hear the hits.
Brian