Well of course it's not dead, buried, salt-the-earth GONE, no Franchise is ever truly gone - even if the company dies, the rights just get passed along.
EA isn't going to say "Yep, We've totally destroyed Mirror's Edge - we hunted down every programmer that worked on the game and shipped them off to Antarctica! And then we wrote a legally binding contract that prevents us from ever working on a Mirror's Edge sequel. Ever". EA and DICE still have the rights to make another Mirror's Edge, and they will hang on to that right unless they can make a profit by selling it to someone else.
But if they aren't putting any effort into making a sequel now, chances are if they EVER do, which is unlikely, you'll be waiting a looooooooong time for it. As in, more than 2 years. Possibly even 4 or 5 years. Or maybe forever.
If they aren't developing anything for it, if they have no plans to, if they cancelled the Prototype and if they are working on other franchises (EA sports stuff, Mass Effect, Battlefield 3, Dead Space 3... a whole slew of other things), chances are they have no plans to develop a Mirror's Edge sequel. Period. It's not on their minds. At all.
I think Mirror's Edge should be given a second chance, I would be very interested in a sequel, but the odds are it's effectively dead.