Not necessarily.  Sometimes transponders simply fail- it happened to an Air India 777 just a few weeks ago.  Electrical systems damage could very well cause it.  Also a crew member working in emergency conditions in a cockpit that suddenly decompressed or was filled with smoke, could have simply inadvertently turned it.  At the time contact was lost, they were out of radio range to ATC, and turning the transponder to squawk a distress code but doing it incorrectly seems pretty plausible.