They updated to version 1.5.1 not too long ago after I reported an issue with Camera Fill on a Nexus 7 (2013). I'm not sure about the iOS counterpart. If they abandoned it (like they did the Kuler app on Android), they wouldn't sell it anymore.
I'm pretty sure they're still developing. Tablets are becoming better at breakneck speeds. I wouldn't be surprised to see PS Touch become a lot like its desktop counterpart as the years wear on (and tablets catch up).
Warunicorn, I'm glad they responded to your report of an issue, but I still feel that they have not changed the program in any significant way since first launching it.
The most important (and I think fairly straightforward) change for me would be to increase the size of the brushes/tools beyond 200 px. If you're working on any medium or large size image at all, that is really very limiting. It's especially true, since tablets and phones can now take fairly large size images.
I may be wrong, but I think Adobe still looks at PS Touch as largely an entertaining toy, to be used by the general public to "fluff up" their photos, not people who are more serious about photography.
With a few simple changes, they could change PS from an average "just OK" program, to one that has some substance, beyond gimics.
Welll...consider the fact that you can export your PS Touch projects as PSDX files (PS Touch's native file format) into Photoshop CC but if you try to save from there you cannot save as PSDX; you must save in another format like PSD or TIFF.
This leads me to believe that it wasn't Adobe's intention for it to be anything other than an extension of Photoshop--a springboard of ideas, if you will. (Doesn't mean you can't do great things with it though. Just have to work with the hardware limitations inherent in the platform.)
It's hard for me to speculate on what Adobe is thinking here. But consider that there are probably thousands of people who use Touch as a stand alone app, not necessarily tied to PS.
I'd much prefer it to be a stand alone app, that I can use more easily and fully in the field.
I still think that adobe just doesn't want to spend any more time with this program.