Linux on the desktop is dead because it never really has been alive. Sure, it's used by a nice group of people who are enjoying it greatly, and while I personally believe that Windows 7 is miles ahead of anything the Linux world has to offer, desktop Linux in and of itself offers an easy-to-use and well-rounded desktop experience. Yes, I find Windows 7 the better operating system, but put anyone behind Ubuntu (or whatever), and they'll get along just fine.
Still, desktop Linux is and always has been a niche thing, and everything points to that remaining the way it is. Netbooks were supposed to be what brought desktop Linux into the mainstream - failed. Then smartbooks were supposed to bring desktop Linux in the mainstream - failed. Smartbooks never materialised beyond the trade show floors, and now, they've been scrapped for the latest fad: tablets.
And this last bit is exactly why talking about desktop Linux has become an anachronism. Linux may not have made an impact on the desktop, but it sure has changed the smartphone world. Android is selling like crazy, and a whole boatload of Android tablets is ready to storm the market, backed by major companies like Samsung. Thanks to HP buying Palm, we'll see a number of webOS (Linux!) devices enter the market, too.
So, yes, desktop Linux may be dead, but Linux is doing just fine in growing markets with huge potential - smartphones and tablets - so it just doesn't matter.