I don't think they go dead, but they can deaden sound once worn. Because they are made from material that is not overly hard, they eventually develop wear spots at the points where the strings contact the saddle, and those wear areas get flattened somewhat such that they can affect tone or intonation. The tone is muffled sounding when the contact point is not as sharp as it should be. The top of the saddle can be cleaned up and restored to original condition with some filing and/or sanding. But if that would lower the action more than desired, then a new saddle is needed, so in that way I suppose they can wear out.
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