Well, they're not really dead: I'm sure that in the foreseeable future images will still be rendered onto a pixel-based (or semi-pixel based) screen of sorts. In css though, it is time to say goodbye: you shouldn't use pixels anymore. But don't worry: you don't anyway. Don't fool yourself into thinking css pixels necessarily translate 1:1 to actual pixels on an actual screen.
Allow me to demonstrate
Actually, according to the css standard, pixels have been defined as 1/96th of an inch , for a while now. For convenience sake though (and who can blame them?), browsers have been equating the css pixel with the actual pixel for all this time. If that meant redefining the length of the inch, so be it. It's not like Windows actually knows the size of an inch on your screen anyway. How could they, and still support every no-name brand Korean monitor on the market? By necessity, Apple can not do any better.
But pixels are pixels!
So mobile Safari doesn't do that. Instead it creates a virtual viewport that is even wider by default (980px), but also allows you to pick the size of your virtual viewport using meta tags. It will also adjust the font size to not be ridiculously tiny. Android uses much the same meta tags - both use WebKit after all.
It's all taken care of! Thanks Apple! Let's have a beer and forget about it.
All this stuff makes it easy to create a site that will look decent on iPhone and iPad. Add a couple of media queries to make your website more responsive and call it a day. Your html is sized to your viewport, and then rendered to the high resolution screen, so text remains nice and crisp.
One item that remains though are the images. If you set your img size to 300 by 200, you probably also uploaded a image file with dimensions 300 by 200. But remember: the pixel is a lie. If you set your viewport low enough though, there are enough (physical) pixels there to render an image with a much higher resolution. Css 4 is working hard to take care of this.
What am I supposed to do?
I have no idea. In a perfect world, I think we should combine physical measurements with percentages, and use media queries based on physical size. No platform properly supports the physical units though; a simple test confirmed that. Tablets could support this: they know the size of their screens perfectly. If they did render and inch to an inch though, a point would have to be a inch/72, and a pixel inch/96, and everything would be broken. Chicken and egg. It'd be nice if there was an opt-in meta tag or something similar for real physical measurements. Because pixels are dead.