Kevin Iole of Yahoo says  Matt Hughes is done after yesterday's loss to Thiago Alves:

Time, and the changing face of mixed martial arts, has clearly caught up to Hughes.
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And while there was a time when most mixed martial arts experts thought Hughes would steamroll Serra, that time is long past. Hughes has now lost three of his last four and has been dominated in each of the losses.

...while the 34-year-old Hughes said he felt good even as he walked to the cage, he lacks the quick, explosive shot that he had as a younger man. Hughes went for a shot early, but Alves easily saw it coming and stuffed it.

Steve Cofield agrees :

Is it old age, a lack of desire, an oversized ego or a sport that is evolving too fast to keep pace with for 34-year-old Matt Hughes?

Hughes lost to Thiago Alves on Saturday at UFC 85 in London and now needs to pinpoint what the problem is before he considers taking another fight in the Octagon.
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In past fights, Hughes on top meant a brutal beating for the opponent. But he never got off in this one as Alves often had a Hughes' arm pinned to neutralize the veteran.

Hughes has looked older in each of three recent losses (St. Pierre twice and Alves). In shooting for his takedowns against both fighters, Hughes was slow. With the speed difference and the opponents' takedown defense, Hughes was often left desperately flailing and grabbing at air instead of latching onto a leg...

The other issue is your fighting support system. Hughes may train hard, but does he train with quality?

He was a longtime leader of Pat Miletich's gym in Bettendorf, Iowa, before splitting from Miletich Fighting Systems last year and forming his own fight team, H.I.T.Squad (Hughes Intense Training) in Granite City, Ill. The Miletich gym is filled with former and current MMA champions. The competition and coaching in the gym is as good as any in the country.

Can the same be said, when you're king of the hill, in a smaller gym? How do you replicate the skills of world class MMA fighters to spar and improve your game?

Should Hughes even fight again, and does he want to?

Zach Arnold, begs to differ:

I call bull*@*% on this premise.

Hughes walked into a lousy situation as far as his fight with Thiago Alves at UFC 85 was concerned. Alves missed making weight by four pounds and looked much bigger than Hughes in their fight at the O2 Arena. Hughes had the right to turn down the fight, but no one in their right mind would expect him to do such a thing. Too much money on the line, too much pressure to screw over the promoters that made him who he is today, and too much competitive spirit to turn down a fight against another quality opponent.

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I don’t suspect that Hughes’ loss to Alves will hurt all that much. The money fight with Matt Serra is still on the table for Hughes and it’s a fight that fans want to see. Two proven draws who can light it up on television when need-be.