According to the MeeGo mailing list the intel version of the MeeGo handset UX currently isn't fully maintained. The netbook edition is also in a maintenance mode. I believe only the N900CE ARM handset UX and the tablet UX are actively developed (and maybe the car-systems UX, but I don't know anything about that).

So that leaves only a very, very small amount of users for MeeGo. (practically non-existent). So I can understand why Nokia decided to make Microsoft a partner. If you are going to try to setup a new platform and application ecosystem, you should try to get the strongest partners you can, or be sure that you can do it by yourself.
Looking at the delays Nokia experienced in the development of the Symbian^3 and MeeGo-Harmattan devices, the non-existence of any Intel based smartphones, and the speed that iOS and Android is progressing, I agree that Nokia/Intel can't do it by themselves.

So yes, MeeGo and the software related to the project will have a very different role now that the biggest backer decided to change its bet.
But I think "dying" is overly dramatic, the different parts will just get very different lives