Twitpic was involved in a trademark dispute with Twitter some time last month, which resulted in the shutdown, so to speak. Twitter has also threatened to cut off Twitpic’s API, which is more or less the jugular of Twitpic since that served as Twitpic’s sole source of content.
According to Twitpic founder Noah Everett, he mentioned over a blog post that Twitter will purchase the Twitpic domain as well as photo archive. In other words, all of the Twitpic photos that are now on Twitter, alongside the links attached to them, will be active like a sprightly toddler. Do take note, however, that Twitpic’s service will still remain inoperational, so you are unable to post new photos to the site.