Well, it could be much worse. It will probably live. Cut the bad mushy roots. I had one that looked similar and it's fine, but it was a tweezing, cutting, seek and destroy mission that was like delicate surgery. Just carefully cut the bad mushy roots, tease them with you fingers to get to the middle, and tweezers are helpful. Then give it a good soak in peroxide. Repot it into a pot that is only maybe a half inch bigger around than the rootball. I use a bark mix on my Dends for the most part and they are happy. The pseudobulbs don't look bad, I would not remove any that are not mushy, and those I would just cut past the mushy parts. Give it good culture:
AOS | Dendrobium Skewer use for watering of orchids
Make sure it gets plenty of light, and water when it is dry, and it should recover. I am not going to guarantee it, but I really have seen worse ones that have recovered, Dends are like weeds. If there is a spike and blooms on this, I would also recomend cutting the spike to help give the plant evergy to recover. Hope that helps some. When you repot you just pour the bark in around the roots and tap the pot gently to help the bark settle. Then give the plant some water, and you are done. Be sure that you soak the bark in water for 24 hours before potting the plant in to it, and sterilize the tools that you use on it. The hard part is over, which is getting the courage to take it out of it's pot and give the roots a look. Deep breath and dive in!