Died as in it shut down? Or died as in nobody plays it?
A little of both I guess. The experience Velvet Sundown was at launch doesn't really exist any more. It's still up and playable (last I checked) but the few people you'll find playing it have no interest in actually 'playing' the game.
They switched away from the subscription model to a one time purchase (all scenarios or buy them a la carte), which was probably the right move, but then they never actually added any new scenarios or improved the base game. Worse, the text to speech is gone, robbing the game of most of its charm.
The developer was bought a while back and they seem to have kind of disappeared. I'm surprised the game is playable at all.