Well, that is why the leaves are shriveled for sure. And also why it has so many air roots. Just my opinion, but when the roots are bad, I think they put out more air roots to try to compensate. I would still repot in good bark, mist it daily and hope for the best.
Okay I will keep misting and repot it. What about the part where all the bad roots were attached, can I cut that off? Im thinking no, but it looks dingey...
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That I don't know. I am sure someone here knows better than I. I just have never had any luck with the spag and bag thing. I only had one as bad as yours when I bought it and it did have one lone root alive. I potted it in the new bark watered sparingly and so far so good. I will know if it either dies or when I repot. You can only try. You will probably need to stake it up and just hope for the best. they are pretty tough.
Good Luck, Becky