Yes, the gelcoat is probably shot. And the reason why the shine did not last has more to do with the fact that the oxidation is coming from within the gelcoat, not how aggressive someone was trying to remove the oxidation.
The gel coat on a fiberglass boat is much like the paint on a car. It is the protective coating that helps to preserve the high gloss appearance of the boat. That is why it is so important to properly maintain the gel coat from when the boat is new. Just washing a boat after it is used is not enough.
In order to keep a boat looking like new, it needs to be thoroughly cleaned, polished and waxed on a regular basis. Depending on conditions, this should be done at least two to three times a season. And more frequently, like on a monthly basis, when the boat is exposed to extremely harsh environmental conditions, such as salt water.
When a boat is relatively new, you can use less aggressive products, such as; Boat Polish, Cleaner Wax, and Carnauba Wax. However, when the boat is more than five years old, you will in most cases need to use more aggressive products, such as Oxidation Remover, Color Restorers and Boat Polish before applying a protective coating of either Carnauba Wax or Polymer Sealant.
Without periodic polishing and waxing the gelcoat on a boat will usually become extremely oxidized within a few years. That is why most boats that are beyond 5 to 7 years old start to begin to look so old and faded.
By the time the surface gets a somewhat chalky look to it, there is really nothing that can be done to maintain its original high gloss finish. That is not to say that the surface cannot be brought back to life and look good for a while. The problem is that even by going as far as wet-sanding the gelcoat, the results are just not going to last. With the time of a few days to a couple of weeks the dullness will begin to creep back.
I hope this helps.
