These are Bagworms on the branches. It could have been the cause of death of the other spruce. They are caterpillar cocoons to moths and can cause serious harm to many different trees, but seemingly blue spruce tend to be favorited. blue spruce are also susceptible to a couple of diseases in Maryland as well. See 'What is wrong with  my Blue Spruce?'

The moths and larva tend to use stressed plants as their host. Despite them being commonly planted in landscapes throughout Maryland, Blue Spruce don't love our mid-Atlantic climate.  They prefer hot sunny and dry weather and colder winters, hence the name 'Colorado'. Maryland mostly has the hot and sunny conditions in the summer months but the humidity and mostly clay and poor draining soils throughout the state can effect the health and longevity of these tree and shrub species. 

The link for the Bagworms will explain treatment. Once the 'bags' or cocoons are formed there isn't anything that you can do until they emerge, beyond hand picking and destroying the cocoons in either a bag or crushing them. You may not be able to reach all of them, but you can try to pick off the ones you can and then follow treatment per the link for the rest. 

If you would like recommendations for replacement evergreen trees that are better suited to our climate, let us know. It would be helpful if we saw a photo of the site and knew some general site conditions like sun/shade, soil moisture - does it skew dry or wet- is it sandy?, and if deer are an issue. 

Let us know if we can help further. 

Emily