For the first couple of years of XNA it didn't install in Visual Studio at all, full stop.
The fact that it no longer works inside Visual Studio isn't an indication that XNA is dead; it's just an indication that it's not a priority for either the XNA team or the Visual Studio team to have it working in VS2012.
The XNA team are busy with XBox/WinPho integration and the VS2012 team are busy with Metro apps. There is only so much resource available for these problems, and frankly the XNA team and the VS2012 team have quite a lot on their plate at the moment.
If you want to write XNA apps for the desktop for Win8, that is still supported. If you want to write XNA apps for metro, there are alternative routes available, e.g. via the MonoGame framework (why should Microsoft duplicate the effort of the open-source community when they have better stuff to get on with?). If you want to write XNA games for WinPho or Xbox, you can continue to do so, but need to do so from inside VS2010.