Like a lot of good songs you can read this one either way. Depending I suppose on whether that last line is "Now we're all alive again, we are the Irish soldiers" or just "Now we all are dead and gone..", repeated for the Irish as well as the English.

And another way would be ending it not with "Now we're all alive again we are the Irish soldiers," but "we are the Irish people."

What it makes me think of is "And eye for an eye and a tooth for a tooth leaves us all toothless and blind".

It seems likely to me that this is really intended to be sung with the playground game in which when you drop a ball for lose a hand, or go down on one knee, and so forth. Sort of anatomical strip poker.