Maybe Rackspace is on a trajectory of death, but this is a false dichotomy. It isn't (or at least shouldn't) be necessary to grow for a company to survive. If you are profitable, staying the same size is perfectly fine.
At the same time, a lack of growth limits how much can be invested on staying relevant in terms of R&D which further separates them from competitors with a positive growth trajectory.
Its also incredibly hard to kickstart a growth engine once it has slowed down. The net result is a flywheel but in the opposite direction.
PE buys companies like this to slow that negative growth flywheel down attempting to stay neutral until the investment is paid off at which point profit can be made.
The long tail is massive attrition as well, because few people want to work at a sinking ship or rather a ship unwilling to invest internally.
Neutral isn't bad, but it's very hard to exist.
Having said that they have been growing, their revenue is up, but so are their losses. They've just not managed to stay competitive.