Oh my god, they did not. They did! The AC/DC continues into the next scene, were we get a slow motion shot of House and Wilson's feet as they exit the elevator and House shows off his hot new cane, which has little flames on the base. Really, it's not even that bitchin'. But that montage certainly was! He enters the meeting room, and all the Cottages react to the new cane. It's ridiculously overdone. I love it so. It really doesn't matter what this episode does now: kill the kids, kill the dogs, whatever. That scene will redeem anything.
When Cameron finishes stating the obvious ("Flames," she says, looking at House's cane), Chase reports that Nick is not doing well at all. The drugs aren't treating the graft-versus-host disease. Foreman says that he thinks he did the right thing. House doesn't care about Nick the Goner anymore and moves on to someone they can help. Chase says that they took Matty off the meds, but his blood count is still tanking. Cameron says that Matty's blood will "literally" turn into water if they can't stop his blood count from lowering. There are sad faces all around. House says that they won't be able to diagnose Matty's infection in time now that he's been given antibiotics. And if they can't diagnose it, then they can't cure it. So it's curtains for Matty as well as Nick. Which kid you do think will get the bigger tombstone from his parents? But House gets an idea: they can expose Nick to Matty's infection. Nick will die, of course, but not before the infection quickly spreads through his immune system-less body. Quickly enough, House hopes, that they'll be able to identify the infection and save Matty from it. This...is a terrible idea. But even Foreman can't think of any other way.
So now Wilson has to tell the parents the new plan. If I were them, I just wouldn't let Wilson into the room anymore. They quickly figure out that they're being asked to kill one son to save the other, and they're not happy. Wilson and House have to inform them that Nick has no chance, since the graft-versus-host disease isn't responding to treatment. It's really better to let Nick die, then, as I saw this happen on an episode of Star Trek: The Next Generation when Commander Riker had to host some parasite diplomat until its official host body arrived on the ship to take over. Before that was done, he had sex with Dr. Crusher. That's the kind of pain you never want to have to face. The parents still have hope that Nick will recover. House says that they can either have one dead son or two. "You should let us do this," Wilson says. Of all the things to start taking a stand on, deliberately infecting a kid with no immune system is quite a bold one. But now the parents are taking a stand, too. They won't give up on Nick. Because they love Nick. And they hate Matty. And more likely, because no parents could willingly do something that would kill their child, even if that child is going to die anyway.