> Does this mean his US citizenship has been revoked

No. Under the 14th Amendment, the government cannot forcibly revoke the US citizenship of anyone born in the US. See Afroyim v. Rusk, 387 U.S. 253 (1967): "Congress has no power under the Constitution to divest a person of his United States citizenship absent his voluntary renunciation thereof".

No, passport revocation can happen to stop someone travelling without suggesting their citizenship is in doubt. See, e.g., the section on abduction of minors in http://travel.state.gov/passport/ppi/family/family_864.html

If I understand correctly, he's still a US citizen. He is now like any other American who doesn't have a passport, except that he finds himself outside of the country.

There are lots of US citizens who don't have passports. Most, even.