This is my opinion; for what its worth.
Barca will probably keep him on due to the perceived negative press that we will get if we sack him.
Pep got the Barca job and excelled at it, he appointed Tito as his assistant. Nowhere does it say that Tito should/will be a success; he has not been.
He should step aside - paid by the club - until such times as he is 100% fit to resume the job. Pep was fit and left due to stresses of the job etc., so how on earth can a cancer sufferer in remission stand up to the strains involved.
Barca should take on a coach under a rolling contract, either until Tito is fit to return, or - if Tito is not to return - until a permanent coach/manager can be found.
Someone like Heynkes who has the experience - both in La Liga and the CL - would be ideal. He might just see working at Barca for a year or two just too good to turn down.
I think that with his illness, his lack of rotation/giving youth minutes on the pitch, his poor decision making and inertia - especially when 4-0 down to Bayern - that Tito is (unfortunately) not up to the required quality in a Barca manager...and it pains me to say that.