In the final conversation between Noodles and Max, Max says to him: "You failed to realize that the cops were in it too", and that it was a syndicate operation. What does that mean? That It wasn't a real betrayal and that Max has staged this anyway with the police?
NOODLES - "Many years ago I tried to save a friend of mine by turning him in. He was a very close friend. Things worked out bad for him and for me."
Noodles betrayed his friend to try and save him, however the cops were on the payroll of Max, and helped in his faked death. So the last years in hiding were all for nothing, Noodles was just a pawn in Max's plan, not someone doing a heroic sacrifice (of his life by hiding as a nobody for 35 years) as a result of trying to help his friend.