No, the dire wolf has not been brought back from extinction

The company that did this didn't directly clone Dire Wolves. Instead, they identified several "key traits" that defined the species external morphology and then edited wolf DNA to gain those traits.

First, this obviously isn't bringing the species back. It's more like artificial convergent evolution than anything else. But even if you accept that bringing a species back that will fit the same ecological niche and resembles the old species is "bringing it back," there's a much bigger problem. We cannot know what the "key traits" for a dire wolf are.

We don't know what key traits are actually required for dire wolves to re-inhabit their ancient ecological niche. All we have are their skeletons. We don't know what their fur was like. We don't know if they had any key soft tissue adaptations. We don't know if they have any unique behaviors that were key to them surviving in their niche. Imagine trying to bring back bowerbirds if you didn't know anything about their nest building behaviors. You could try to modify something similar from a similar species, but if all you had are their skeletons, you would have no idea that they were famous in life for making their elaborate nests.

No one alive has ever seen a dire wolf. No one has ever spoken to someone that has seen one. No one has ever read an account of what these animals looked like, behaved like, and lived like. We're just assuming here that their behavior is identical to other wolf species, and that the only differences are the major morphological ones. We can't know what these creatures were truly like, as they were hunted to extinction long before writing was ever invented. And there's nothing in the oral histories either, beyond just maybe stories about great big wolves that might, by some miracle, be a distant remembrance of them.

Also, for perspective:

the two species share 99.5 per cent of their DNA

And humans and chimpanzees share 98.8% of our DNA. Imagine if we went extinct, all you had was our bones, and some space alien landed and tried to bring us back by modifying chimp DNA. If they had nothing else to go on, how close do you think they would actually manage to really bringing us back? Odds are they would end up with something more akin to various ancient hominid species than our present human race.