essentially yes. You can use the web SDK to play songs but it's a very poor experience. Native apps can no longer play full songs.
I'm surprised that was possible in the first place. How were there no clients that implemented Spotify then? I'd have loved to use something less shitty than the Spotify player, both on Linux where they keep breaking things that used to work and on Android where offline mode is a joke.
The only third party Spotify player apps I saw were remote controls that just talked to a connected "device" (potentially on localhost).
There were tons of unofficial clients, mostly open source efforts as Spotify didn't allow for any monetizable components in apps so it never made much sense to build a business off the back of it.
I would call the experience anything but shitty. And yes, there are numerous of apps building on top of this, I maintain an app in production that use it.
Is it temporary or permanent?
Permanent. Spotify doesn't want apps streaming music through anything other than Spotify's own walled experience for a number of seemingly financial reasons others have highlighted here.