We're not talking about the "status of the franchise," we're talking about whether or not they want to do a reboot or a sequel, and if so, whether they want it to have Singer as the director.
I certainly hope they reboot, but it's not like Superman Returns did so badly that there was no hope that they would make a sequel. Not only that, but it can be looked at as either a first film or a sequel, so from their standpoint, they might think, "well, we're not making a sequel just to that film, but earlier and more successful films."
Which is why even if Singer's out, we aren't out of the woods yet.
Listen, they made a decision a long time ago that they wanted to explore other options, including rebooting the whole thing, which is what will happen.
Singer was hired originally based on his success with the X-Men franchise, as well as his body of work. WB essentially did what they did with Christopher Nolan on Batman Begins, which did exactly what they were needing to do for that franchise. They ultimately gave Singer the freedom to do what he wanted creatively, which just so happened to be a direction that a lot of the mainstream audience didn't respond to. That sparked the push for the next film to be more action oriented, to include a super villain, etc. in hopes to create some sort of film franchise out of that initial investment. After all, as you've said, Returns wasn't a flop by any means. It just didn't have the impact/response that they were expecting/needing.
The more and more time that passes, the more and more sense it makes to reboot the whole thing with a fresh new vision, especially because of how much Returns was rooted in the Donner universe and storyline. A fresh take on the character is something new, something fresh, and ultimately something that we haven't seen yet. The potential there is unbelievable especially with the success of Batman, Bond, and now Star Trek. WB knows this, and I KNOW for a fact that they aren't just brushing Superman aside. They can't. It's too big of a property.
The real issue is finding someone they are comfortable with and can trust to not bury this franchise and create the Superman film that the studio needs as an important flagship of their stable. This means quality, this means big buzz, this means big numbers at the box office, and of course, the ultimate goal of the studio...this means a franchise they can continue to ride on for 10+ years down the road. The benefit of this? After Batman finishes up around 2012, WB can then look to a hyped up, rebooted Superman to carry the weight and spotlight that Batman has had. This is of course, assuming they find the right guy in time.
Singer is out. The possibilities and the potential is just too great.