Yes, it looks like the stem has rotted. There is still a chance you can save the rosette at the top if you can cut through healthy stem above the dark part (sterilize the knife with alcohol if your first cut does not look good).
Sometimes when a plant gets so big that it completely covers the container, it can block the exit of moisture from the soil through evaporation. Depending on the plant (it very much varies) evaporation may be the primary route water exits the soil. I try to leave a small ring of soil exposed around the edges of the plant for most Echeverias, which helps make it easier to water and helps ensure unblocked evaporation.
Some brands of cactus soil are not really suited to Echeverias without modification. If there is less than 50% rock in the soil to start with, add however much perlite/pumice/gritty equivalent you need in order to arrive at that approximate amount.
I always water to completion (until water comes out the holes at the bottom) and believe that not doing so (except perhaps in the winter if it's cold and dark) does not really serve the needs of the plant. I try to judge by soil moisture, not the firmness of the leaves, when it is time to water again. If I've waited until the leaves are going soft, I've allowed the plant to slip out of its comfort zone.
These things happen to even the most expert growers, though less often than the rest of us. The most you can do is observe and tweak the variables that are under your control and try again.
