freeDOS certainly isn't and shouldn't be dead. although FreeDOS should look into supporting fat32 and possibly ext2 filesystems.
FreeDOS really is like a proper GNU operating system. conceptually i think it is as much GNU as Linux is, although it is only an 8 bit system so the two can't be seriously compared for functionality.
a LOT of things only need an 8 bit system though, and i think that FreeDOS and perhaps DR-DOS (which isn't dead either) will still be able to be used in a lot of commercial, retail etc environments.