There’s more than one way to read Nietzsche. For moral philosophers, we interpret ‘God is dead’ to mean that humanity will no longer look to God for morality. If that’s true, then Nietzsche seems to be on track.
Based on his other works like ‘Twilight of Idols’, we get a glimpse of Nietzsche’s target. He only wishes to undermine the Church’s authority over the mass’s principles. Because the Church commands moral authority, man is inevitably slave to the aristocrats.
I don’t read Nietzsche’s work should be read as the literal collapse of religion as an institution, but merely seeks to subvert the Church’s authority.