The slide they used to illustrate this specifically showed how MTGO and Duels each target a different market, while MDN is supposed to encompass both:
No, it's just a major, expensive initiative that a publicly-traded company promised to their shareholders. Maybe it works out, maybe it doesn't, but it's a lot more real than something never formally announced that just leaked out in rumor. Their plan, 100%, is to kill MTGO and replace it.
The reason I'm saying collections probably won't carry over, BTW, is that MTGO's business model is really bad and Hasbro are almost certainly going to see a new product as an opportunity to fix that. Even if we include most of the core MTGO features (full card sets, draft formats, precise rules mirroring, etc.) having a product whose pricing is fundamentally based on the (almost never used) paper MSRP and which has a mechanism for passing value back and forth is an awful idea. If they launch this new thing with $2 packs and daily gold and more aggressive use of Phantom events and all the other stuff you can do to get a bigger audience when you're not anchored down by redemption, the value and purpose of collections aren't going to match up and they might not even cover every card to begin with.
That said, maybe they launch and they have some kind of partial or full conversion process to keep people happy, I dunno.