I haven't looked into that whole Hello Kitty deally but Capcom has collaborated with Hello Kitty before, they had some Hello Kitty stuff in a Monster Hunter spin-off game they had. Maybe it's just that... some costume maybe? I dunno, it's weird.
@MMX MMO: Oh, that one. Yeah, Capcom is making "Rockman Online" an MMO based on MMX... but I heard it's for Korean only or something like that. I don't know much about what's happening to that game though... it might have been cancelled for all I know. XD (I hope not though, it looked potential fun, despite it potentially never coming to the US)
@Original topic: This made me sad. I'm not one to completely blame a whole company but Capcom is really making that hard. Monster Hunter Portable 3rd has no news to be released in US and that HD ver, which let's you play on your PS3, isn't confirmed for US either. They had some shaky moments a few years back and with Street Fighter IV and Resident Evil 5, they were able to get some momentum again. That's why we're seeing all these fighting and Resident Evil-ish games.
As for Megaman being "dead" I highly doubt it. I'm not the most knowledgeable person about these things but I don't think Capcom will abandon a franchise that has been this long running and has quite a following. The name "Megaman" still has a meaning to most "hardcore" gamer; just look at how much coverage the cancellation got, it was everywhere. As for what direction they take the series... that's a different story.