I'd definitely say they're dead, over here.
I haven't picked up a new Tamagotchi in so long... I knew the Version-engine would run out of steam quickly.
I don't even think bringing the TMGC+C overseas would bring the brand back.. They'll need to pull another Tamagotchi Connection and bring in something drastically new... not just a colour screen with the exact same game.
Now, by that I don't mean they should throw out the Virtual Pet entirely... That (in my mind at the very least) is what killed the new line from the start. V2 was shady and V3 screamed of a plan that would eventually end in ruins, in my mind. What kept me from buying as much, at least, was that they never changed the pet itself and kept weighing down with features that merely distracted...
tl;dr, Bandai? MAKE ANOTHER MORINO IT'LL SELL LIKE HOTCAKES AND THE BRAND WILL BE BACK AND THE WORLD WILL BE IN YOUR PALM ALL YOU NEED IS TO MAKE A NEW VERSION OF THE MORINO PLZ PLZ PLZ
(...or you could, y'know, blame the recession...)