Apparently Baron Cohen bailed on playing Freddy because the band wanted the second half of the movie to be about the rest of the band post-Freddy. Which is insane of them to think that's a good idea.
We don't really know what the new version is, but I doubt it's that cut-and-dry that he dies halfway, they probably tempered that some. Freddy'll be the main lead, but sure the other guys are still demanding some focus too. I'm pretty confident in Singer in terms of balancing that though, if he has weaknesses as a director ensemble stuff wouldn't be one of them. Freddy'll be the Wolverine/Keyser Soze, but it won't be solely about him alone with the other guys pure background.