It’s not officially dead in that there has been no announcement to that effect. But yeah, there haven’t been any updates in half a year and the developer has been conspicuously quiet.
I’ve also been waiting for some sign of life before I invest in ST2 (not in terms of money, $60 is no big deal for me). So far, magic 8-ball says outlook not so good. If I had to guess, I’d say real life has just taken over and ST isn’t on the author’s radar so much anymore. That’s something I can certainly identify with, but for a commercial, closed-source project, it is effectively a kiss of death.
On the other hand, could be the author is working furiously in the background, cooking up some brilliant, mind-blowing stuff and wants to unleash it on the world in a fury of epic awesomeness. Who knows. (I’m dubious.)