Insects destroyed fron yard tree-shrub

Hi,
The 10ft tree-shrub in the fron yard has been destroyed by insects, the ones which are hanging from a pouch/bag like thing,only the insect mouth shows from the shell shaped bag.(Are they bag-worms?)The tree has been dried up from where they attacked, which is 85%.15% of the tree is same green. The bad thing was the tree looked like it is just dying and the insects could not be seen unless looked too closely since they were in bags, which are made of dry shrub. The moment we caught, we sprayed the insecticide made for those.
Though the insects have all died, they are still hanging upside down in the bags, shaking the tree did not ditatch them.
Our question is, how to get rid of them?
Would our tree come back to life or would we have to replace it with other, since part of it is still green?
Any suggestions, leads folks?
Thanks ....

 

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