They haven't "gone under," exactly. Bit-Blot was primarily a collaboration between Alec Holowka and Derek Yu, both of whom have gone on to other projects independent of one another. It's not known if there will be another Bit-Blot game, though Alec is supposedly doing preliminary work on a spiritual successor to Aquaria.
I think the two of them haven't strictly ruled out the possibility of making another game together as Bit-Blot, but at the moment I'm not aware of any such future plans.