Fortunately, this is World of Warcraft, and no one in Warcraft really ever stays completely dead -- just ask Kael'thas. But as a more pressing concern, players are currently wondering how they'll be able to do Varimathras' quests (for the Loremaster achievement) with him no longer hanging around the Undercity. New Blue poster Ancilorn says not to worry -- they'll come up with a way for those who can't see Varimathras to do the quests associated with him. Or, and probably more likely, they'll just take them out of the Loremaster requirements.
But a moment of silence, please, for one of my favorite lore figures, Varimathras. He was always on the winning side. Except for, you know, that one time right at the end.