I've been following the QEMU project since 2005, and it was never "dying". It's attracted more developers as it's grown to support more platforms and emulate more boards. I.E. as it's become useful to more people.
Show me a point in either the mailing list history or the repository history where activity significantly slowed for any length of time.
For those of us emulating arm on x86 and similar, KVM is completely uninteresting because it doesn't _help_. The only thing it helps with is doing x86-on-x86, and you could do that with xen or vmware if you wanted to.
Before KVM, qemu had its own kernel module to do native acceleration (kqemu). That module was hampered by the fact it initially wasn't open source, and then when it was released under the GPL there was still no repository in which the module was developed (so all you had was a source tarball, not a development process). This wasn't fixed because the qemu developers weren't really _interested_ in it, again because there was too much work to do on the main qemu (replacing dyngen with tcg and such).
Ingo Molnar is speaking from ignorance in a big way on this one. My laptop (a Dell Inspiron E1505 that came preinstalled with Linux) is an x86-64 system that doesn't support the VT extensions KVM needs to function, so I've never been able to use it. My next laptop will probably be a mac, on which I'll run Linux via parallels. I care enough about qemu to have tried summarizing its mailing list traffic for a while (http://landley.net/qemu) but I don't care in the least about kvm.