I don't think any sort of assumptions about whether the birthday award will be discontinued can be derived from that communications. The exact same thing would have happened last year if you asked ROP at this time of year about a b/d award for next year. ROP staff probably won't know what next year's birthday gift will be until December, perhaps late November at the earliest.
However I wouldn't be one bit surprised if it is discontinued due to all the cutbacks taking place. When comparing the 50% off or the free upgrade you need to consider that in order to take full advantage of the 50% off it means you need to have a significant number of miles in your ROP account, whereas for the free upgrade you need no miles. So in my case changing it to a free upgrade would be better, being I abandoned putting any more miles into my ROP account early this year, but being I'm a gold member for 2 years, an additional birthday upgrade next year would give me something I could use. So just about all ROP members can take advantage of the birthday upgrade each year, whereas more limited numbers can take advantage of the 50% off each year, so TG's costs for the 50% off award might not be as bad when considering that. For those who've flown a lot, and have a lot of miles in their ROP account, discontinuing the 50% off b/d award would likely have a devastating effect on the popularity of ROP. Or even worse, getting rid of the birthday gift all together and giving us nothing - also wouldn't be surprised if that happened.