The first D&D product I purchased (apart from computer games) was the D&D Basic Game (3rd edition rules; the one with the 16 miniatures). Soon after, I purchased the new 4th edition Starter Kit. I tried both versions with my brother-in-law and his girlfriend, neither of whom had ever played any RPG at all, and they preferred the 4th edition version. I relate this story as a reminder that 4th edition was, I think, partly designed with an eye to getting new people into the hobby.
Don't know how successful they were; I like 4e, especially the Essentials line, but I don't really play that often (my kids are the only gaming partners I have). If I actually played Pathfinder, then I might like it better, but I think I prefer the simpler, exception-based rules of 4e to the complex game rules that seem to characterise 3.x. Also, my primary experience with 3.x that included actually playing with other people was the Neverwinter Nights modules, which was usually the PvP modules (War of the Rings, Mike's Battle of the Dragons), in which I was being perpetually pwned, regardless of what class/build I used. That experience sort of soured me on 3rd edition, fairly or not.
But to get back to the main question: "Is 4th edition dead?" Well, some others have made some good points about the important role that DDI played in managing the game, but I think that the tools offered on DDI can be emulated rather well (perhaps better!) by dedicated fans. I'm no computer genius by any means, but I developed (and unfortunately lost) a spreadsheet program that automated the character sheet. It used the two "Heroes of" books, and was pretty clever, if I do say so myself. When I typed in the character's class and race, it automatically calculated the attack and defense bonuses; when I put in particular feats, it did the same. When I leveled the character up, it automatically recalculated the new stats.
My point is that, if a non-computer-programming schlub like me can do something that complex, then I'm sure that there are plenty of more highly skilled members of the 4e fan community that can do greater and higher things.
4e will die only if we allow it to die.