I'd say so, yes. I've been unable to come, and as far as I'd heard, no one else has had the time or the interest to show up. Gage and Dalamar (sp?) tried to get things going again, but all attempts more or less flopped from I could see.
It's regrettable, especially considering quite a few of us put a decent amount of time, money, and effort into Midgar and Dagorhir. And now, at best, we're at square one again. At worst, the only places we have to fight now are at least 45 minutes to an hour away (Alterra in Edmond, Amtgard in Chandler from what I heard).
So, short answer, yes. Midgar is pretty much dead.