I've had several cards closed by both Citi and Chase for non-activity over the years. As far as I can tell it was a non-event on both my credit score and my ability to get new credit with Citi or Chase. The accounts report as "Closed by Creditor" on my credit reports but that does not seem to be negative in any way. Just a neutral factual statement. There was no immediate effect on my average age of accounts because the accounts continue to report for another 10 years. Utilization is the only "hit" because less available credit but my utilization is fine even without them.

If you can get it reinstated that's the best bet. If not, don't loose any sleep over it. It's not that big a deal unless you have a very "thin" or short credit history. And yes, like everyone says, use all your cards occasionally.