I do believe he died last year, but even then he wasn't on for a while. the last I remember him being on a commercial was back in 2000. I believe it was in an advertising campaign for a new movie, Godzilla I do believe. He was taunting Godzilla by saying, "Here lizard lizard lizard," after which, Godzilla proceeded to step on him. Mystery solved, Godzilla killed him in 2000.
Im sure its just like most other icons where they just found a new one. Ever remember the crunch m&m's? thats how they orignaly got the orange m&m guy and he was always paranoid because they were so good. They quit making them then they brought him back as a pretzel...
Well, I never knew what happened to the Taco Bell dog. I remember when I was younger I would see him on every Taco Bell commercial, I think the last time I saw him was around 2000-2002.