Steve is alive and he along with the others on the raft will return to the Island.
Steve was killed in the flaming arrow attack on the survivors.
Steve's character is bigger then to kill off without saying anything. Like Frogurt,he wasn't in it much, but everyone knew who he was, and everyone knows who Steve (or Scott?) is because he is always confused with Scott (or Steve). As like Frogurt, had they killed him off, we would know by now.