Sanders was losing ground even before this, so I'm not disagreeing with your analysis... sad as I am to say that because Sanders was actually my favorite of the democratic candidates.Correct. I know campaigning very well and it's extremely difficult to come back from something like this, especially at the presidential level. Every day a candidate is not out there are votes and money he is losing.
On top of that you have his age and the now apparent health risk which will turn off even more voters. Since Warren is basically an echo chamber for him I don't see how he stays in.