They seem to be doing just fine with their current efforts, from which really interesting things like the MinimalT protocol has emerged. If I have one frustration, it's that they haven't released a reference implementation of it. I had a f2f conversation with DJB at Real World Crypto a few months ago and the explanation was completely reasonable: they are still working on cleaning it up and making it suitable for external consumption. I still want it today though :-)
David Sheets did some work on rebuilding portions of the protocol in MirageOS: https://github.com/dsheets/ocaml-dnscurve . This level of interproject coupling is just fine by me -- the whole point of library OSs is that we can pick'n'mix these things much more easily over the years, and that's working out fine.