I've been playing Minecraft clans, factions, and towny servers for 3 years now. I can honestly say, no. Not all factions die out. Some will last until the server ends. Mabye not under the same name, but the same basic group will tend to stick together through thick and thin. I speak from personal experiance. I've been playing with the same basic faction for three years. Though we gained and lost members, the 3 of the core are still there. When speaking strictly in terms of massivecraft, factions like Alamut and Algaron still go on, though the old farts may not exactly be thriving, They're still there. Mabye not the same as they were, but they're still there and still kicking. I saw Alamut recruiting just the other day, so who knows? Mabye its coming back.