S4 does seem unlikely, but it could still happen, Jack just needs time to himself, alot of time. He can come back when he is ready, meanwhile Gwen & Lois I guess are taking over Torchwood duties, if Torchwood even exists now, typing it yes I think this is the end of Torchwood.
anyways during the episode, I started to wonder "would the tradgey be that the government pull this off, and not a big fuss is kicked up" but Jack made the decision no one in government would make, to sacrifice his own family, not just the loss of his grandson, but his daughter would never speak to him again. Jack really does not need someone like Johnson on his shoulder, didnt we already know that Jack would make this choice? he has made a similar choice twice now (1965 & Smallworld)
as for the government, im not sure why the female MP is so quick to take power, she is hardly innocent all of this, we dont know the impact of what Spears did but I think we should assume she did it.
TBH as much as I feared RTD would give us a reset button, I fear that come the Doctor Who specials & S3 of SJA, people are just going to continue to act like aliens are the bogeyman, deep in denial.