Nope, it's far from dead. We've just decided not to start a thread until we get the tech demo released.
It's difficult for me to dedicate a lot of time to the game all at once. I get spurts where I make a lot of progress, and then I slow down a good bit for weeks or months at a time.
I reworked and optimized the code and made a lot of progress on the core engine, but I am having some issues with level change code that depends on the stair movement right now. Once that is done, we are not far from finishing the first level and tech demo. Things will hopefully go faster after that.
It's best for us to lie low until we have something playable.
Legacy now has a new DirectX 9 engine that is super fast and can push thousands of sprites around at once without slowdown. Please be patient and stay tuned. We are really trying our best!