Were all people dead in trespasses and sins until God brought them out of it when they believed the gospel?
Yes. The context teaches that because Christ died for all, every last human being was dead in trespasses and sins until God brought them out of that deadness by an act of God when they believed the Gospel. This applies to all people, not merely some.
Les explains that Paul has just stressed that Christ died for all. Since He died for all, every last human being was dead in trespasses and sins until God brought them out of that deadness by an act of God when they believed the Gospel. Paul then says in 2 Corinthians 5:16, “wherefore,” because that work had been accomplished. Les notes Paul is speaking of Christ’s death, burial, and resurrection, not John the Baptist or Bethlehem.
And that he died for all, that they which live should not henceforth live unto themselves, but unto him which died for them, and rose again.
Wherefore henceforth know we no man after the flesh: yea, though we have known Christ after the flesh, yet now henceforth know we him no more.