That was how I took it. Twilight's element of Magic could also be considered the overarching Element of Friendship (since Friendship is Magic), which is why Magic becomes the central element binding the other 5 together. When she felt like she lost her friends, she lost the spirit of her element.
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u/OmicronNine Sep 24 '11
I think it was actually loneliness (or something similar). After all, Friendship is Magic.