Just bought one of the limited edition emerald green Standards and it's reignited my interest in the Variax/Helix system. Have spent most of this afternoon getting caught up on Variax talk across all of the online forums I could find. Based on everything I've read, I don't think the Variax is dead. I do think a number of factors are in play right now:
Everybody's still dealing with the impacts of the pandemic (supply chain problems, etc.)
Line 6 is part of a worldwide brand (Yamaha) that probably moves slower than Line 6 did when the original Variax and JTVs were released
Variax will likely always be a niche product
There's a lot of great ideas out there about how to improve the product/expand its market. No telling what Line 6 may do in the future. For now, Variax, Helix, and all other types of gear are ultimately tools. Use them if they're right for you. If not, you can always try something else.