Those were the last recorded words before all communication with the shuttle was lost. It was breaking apart and encountered multiple system failures almost simultaneously. (Scroll down on this link to view the data. Look, especially, at events beginning at 72.204 seconds.)

At first, people on the ground who saw parachutes believed the crew had ejected. But unlike the comparatively primitive Mercury space capsules 25 years before, there was no escape method for the shuttle's crew. The parachutes were intended to safely carry the solid rocket boosters to an ocean landing. (Scroll down on this link to view what happened normally.) Disengaged, the parachutes were flying on their own, with nothing attached.