I'm not at all in favor of what this auction represents for intellectual property... but I will speak to the original question of "Is Retropie the end of real Atari gaming?"
My answer is an emphatic "NO".
I think there will always be a contingent that want to play on real hardware, just as there is a contingent that likes records and jukeboxes. We've had 8 track tapes, audio cassettes, CD's, MP3's and all manner of digital media since the record was invented - but there are still folks who simply prefer records and will continue to collect, buy & play them. I myself am a jukebox FREAK. I currently have jukeboxes, I've restored & repaired countless, and stocked most of them with records after I restored them. But I also own & subscribe to various forms digital media as well. It's hard to have a 45 spinning in your car :-)
I think also that there are quite a few Millennials who have NEVER seen a 2600 in the flesh, much less gamed on one - in many ways, emulation brings people to the table, so to speak. They get a taste and want the real thing. We see this phenomenon everyday on this forum - younger folks wanting in on the real thing, but don't quite know where to start. But they experienced it first through emulation in many, many cases.