That may be the case,but I wouldn't completely rule him out just yet.Its known he is having problems getting the bike how he needs it to be.Since he had two years away from Yamaha,the team and the bike have(rightly) been moulded around Lorenzos requirements.
Historically,if you look back over his career,when he moves to a different class or team,the first year is to get everything setup to his liking and the second is for winning.The exception (apart from the Ducati debacle)to this was the first time he went to Yamaha.He won the championship it the first attempt.
Imo,Lorenzo is now the class of the field,and the Honda is a much better bike than the Yamaha (as it has been for the last couple of years). If Lorenzo was on a Honda at the moment,the rest of them (Marquez included) wouldnt see which way he went. Next year,Rossi needs to be at Lorenzos level again.If he cant hack it,it will imo be time for him to call it a day.I suspect he knows that too.
He has won a race and had some good races & results this year,so hes a long way from being past it. By his own standards though,hes quite a way below par.It still remains to be seen whether he can can get back to the level he was at three years ago.
Imo,the jury is still out,but the clock is ticking.