The death of <insert the process of the day> will probably happen at some point but I think that for Google to consider any dropped domain NG, for whatever period of time one determines, as to having authority is not taking into account a lot of variables that are make sense.
One small real life example:
About 20 months ago I was looking at buying into a business on the west coast of Florida. The business had a decent web site and some very strong links... in fact a lot of very strong golden backlinks. I decide that the biz does not really fit what me so I pass on it and move on.
Not all that long ago, I decide to check the site and see what is happening with them. Site is down and I get the "Server not found Firefox can't find the server at www.site.com" message.
I then hop into my InternetBS account to see if it is available and it is so I buy it and recreate the site with some minor changes.
Now, I have the domain, a site that is pretty close to what it was in the past and it is laden with backlinks from some real strong sites.
Google is going to say, "BTB, since that site was down for 8 months I am giving it no authority." or is Google going to say, "BTB, nice to see that you {got the business up and running again|remembered to renew your domain|started your business up again|some other random reason}."
I would think the latter myself as that makes the most sense to me in a real world situation.