I'm by no means an expert, but have been down the demodex road with Angel, so here's my two cents
I think dogs with severe generalized demodex did eventually die sometimes, as the dips were often ineffective, and dogs with severe mange of either form get secondary bacterial infections. Dogs/pups get demodex due to a supressed immune system, so dogs who got severe, generalized demodex, likely had something else wrong with them, which was causing the immune system to be supressed.
From what I understand, demodex is and always has been relatively common in puppies, and generally clears up on it's own if caught early, and the underlying cause is addressed (nutrition is a big culprit for lowering a pup's defenses).
Demodex itself (the mite) wouldn't affect the organs, as it is a mite who lives in hair follicles, so is limited strictly to the skin. When there's an overgrowth in mites, they irritate the follicle and surrounding skin, which makes the pup/dog susceptible to bacteria, which CAN go inside the body and infect organs, blood, everything.
When Angel had demodex, my vet told me that ivermectin is not technically approved for dogs, it's meant for horses and swine, but that it can also be used in dogs. However, it can adversely affect collies (I believe causing blindness?), and, as Angel is a mixed breed and we couldn't be positive there's no collie in her, he didn't want to risk it with her. Her mange was localized, she had a spot around one eye, and another on her muzzle, so dips weren't an option either. There are creams you can use, but it was not safe to use it around her eye. Which left us with the option of waiting it out. It took a year, and a change in diet, but she got over it:)