1600 daily peak isn't massive but it's still very much playable. You'll have a dozen full servers to play in.
Nothing really happened to Battlebit, but this is what happens when you have a live service game without a huge budget. Slow updates kills a playerbase, and eventually people lose interest. It becomes nigh impossible to gain new users without an ad campaign with I don't think they have a budget for.
Edit: They also apparently didn't update the game since February. That'll do it.