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Eh, they still have Fabric and Twitter TV. Everything will be fine.
Yes, but are the big content creators on Vine going to be able to make that transition? It's a very specific format which people have tailored their skills for. I don't follow it that closely but has there been a big downturn in activity? It seems like there's a glut of content every time I check in on it.

Edit: Not sure why you mentioned Fabric, it doesn't seem to have anything to do with this.

He was been ironic. Twitter is clearly doomed, and killing a good app is only one more mistake, I guess. They could at least sell it, make some money and downsize their team.