Reader Bob asked this back in mid-2007, and I figured it was better to get some time and distance between the actual ending of Infinite Crisis and answering it, and since FINAL Crisis is almost over, I figure now is as good a time as any to answer it.
In any event, yes, the powerful energy blast that Dick Grayson, Nightwing, receives towards the end of Infinite Crisis was initially intended to kill the hero.
Back in March of 2007, Dan Didio and Judd Winick revealed at a panel that the idea of killing off Dick was more or less both of their idea.
The notion being that Dick's role in the DC Universe was a bit un-defined (he's not quite Batman, but he's also not a sidekick), and that through his death, he could effect change on a whole host of other characters, and also work as a way to bring Batman, Superman and Wonder Woman back together again, which was a problem going into Infinite Crisis, that the Trinity was a bit split.
In the end, it was Paul Levitz who nixed the idea, feeling that Nightwing was too good of a character to lose.
This is why Bruce Jones' Nightwing was a bit doomed from the start, as he was going to have the book star Jason Todd as the new Nightwing, but when Dick Grayson got his reprieve, suddenly Jones had to work in TWO Nightwings into his story that was meant to only have one of them (this is not to say that his run would have been good with just one Nightwing, just noting that he clearly had a bit struggle to work with on the book).