I think your interpretation is mostly right. See comment above.

Yes, this is the saddest XF fanfic story I've ever read. Nothing else comes close for me. Not stories where Scully dies or Mulder dies or even the Gunmen's onscreen death, though that comes close. I think it's because as horrifying as it is, this is a logical place for The X-Files to end. It ties everything together, and forces us to give another look at what Bill Mulder did in sacrificing his daughter to buy them time to try to save the rest of humanity. "We've all had to give up someone."