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They're not dead, just hibernating. They'll come back to life with WM7 (which will probably be buggy until 7.1, then you'll need to buy a new device to get it).
Microsoft left a mighty big gap in the amount of time since the iPhone came to market and something relevant to compete against it. 2 entirely new phone OS's, 3 if you count Apple, have launched and all we're seeing from Redmond is 'spy-shots' of what may or may not be WM7. They're sure giving everyone of lot of time to get entrenched...
There's enough market share to keep everyone afloat, but Microsoft has lost out on the chance to be any sort of standard.
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