There's no indication that it's dead, it just launched prematurely (or early to create hype, charitably) before it was ready to scale. Powerwall 1 was similar.
Powerwall 1 was an actual product that you could buy (even internationally) and worked?!
Was it? I work in an adjacent space now (though didn't back then) and everything I've heard is that Powerwall 1 was vaporware. Even now, Powerwall 2s are hard to come by, though not to nearly the same extent — Tesla uses that product line as a way to soak up excess battery production when its car production bottlenecks, but historically batteries have usually been the long pole. That's essentially the only reason LG Chem/Sonnen/etc have any market share.
>excess battery production
Tesla buys batteries from Panasonic. Why would Tesla have excess supply?
No idea if this is true, but Tesla might have a contract for X batteries at Y$ but only end up needing Z<X for its car sales. In every industry it's a good idea to find a use for excess materials.
Gigafactory is a joint venture between Panasonic and Tesla. But either way, in a world where demand for batteries far outstrips supply, the contractual ability to buy a greater quantity — knowing they can be sold profitably in any form factor — is an asset. Underpurchasing would be squandering that asset.
Tesla does not buy batteries from Panasonic. They joint manufacture a cell of Tesla design. The cell design is Tesla IP, not Panasonic's.