Yes it means its failed and if you used 8.9 Matrix Storage Manager it failed it because of a bug.
RAID 0 all bets are off when it goes wrong.
Well, the drive turned out to be just fine - MSM failed it for no apprent reason at all, and I had to destroy the RAID-0 array and rebuild it using BIOS raid utility. Needless to say, the information on drives has been destroyed, and it had to be restored from the backup. I have downgraded the MSM driver and utility to 8.8 - thankfully Intel made it possible to downgrade by simply launching the installer of MSM 8.8.
A little bit more background into on the problem: I was experiencing BSODs (Windosw 7 x64) once in a while, and could not determine whether it's a faulty MoBo (Intel DG45ID) or something's wrong with RAID. A couple of days ago I have upgrade the cpu from Intel Core 2 Duo E6600 to Quad Q8200, and all of the sudden BSODs started occurring every hour or so. When I have put Core 2 Duo CPU back and ran some memory tests, at that point I got the "Offline Member" problem. I will run the system as is for a few days, and then will put Q8200 back to see if system will become unstable again. If not, then MSM 8.9 is to blame. I will post here once more data is in.
(BTW, couldn't edit this message with IE8 - only with Firefox.)