Yeah Arthas, in lore, is now dead. In game, outland and northrend are in different time periods, They did talk about adding portals to outland and northrend to caverns of time after giving those areas a "cataclysm" treatment, but they realized in order for those areas to be relevant they would have to retool the entire storyline of those zones again.
it's bizzare, you literally go BACK in time depending on your playthrough. DK's have to have the most confusing timeline. "Arthas is alive!"
*enter capital city in current cataclysm content*
"Arthas is dead!"
*level through outland, make it to northrend*
"Arthas is alive!"
*leave northrend*
"Arthas is dead!"
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