As a Syracuse fan I'm contractually obligated to wish Melo well, but I think he's basically done. Not because he's totally cooked but because he's got Iverson Syndrome: absolutely cannot adjust to a smaller more specialized role, so the holes in his game become too damaging as his overall ability diminishes.
I DO think he'll get at least one more shot in the league before he's done for good, though. Most likely candidate is the Lakers with LeBron's influence there.