Well, there are always the 1.6 nazis (using nazi as a loose term here), but generally, yes, 1.5 is dead.
But when you do the compaison, there are still some servers playing 1.3. The problem is that Valve is ditching WON Authentication. This means, no wonIDs. Instead, they've replaced it with steamids. Without the WON auth system, pre 1.6 servers wont be able to run.