No, not exactly. The SHA-1 hashing algorithm still does what it is supposed to do. SHA-1 creates an unpredictable 20 byte “fingerprint” of the data input into the function, in this case a web server certificate. It is the unpredictability of the output that makes cryptographic hash functions so useful. After all, if the fingerprint could be predicted based on how the input changed, it would be easy for an attacker to forge a web server certificate. Simply changing a single bit from a “1” to a “0” produces a dramatically different fingerprint.
When two different inputs are found that produce the same fingerprint, this is called a “collision.” Collisions are certainly possible for any hashing function, not just SHA-1. This is because there are an infinite number of possibilities for the input and only a finite number of outputs. Since the output cannot be predicted, the only way for an attacker to generate a bogus web server certificate is to try one after the other and see if they get a collision. In this case, a collision would be a rogue certificate that has the same SHA-1 hash as the certificate being forged. This is called a “brute force attack” and is a well-known technique.
The strength of the hashing function is based on how much work a computer must do to find a collision. Therein lies the problem—computers are getting faster and faster. Bruce Schneier is a well-known cryptographer, speaker, and blogger. He wrote a post estimating the cost of creating a single bogus web server certificate that is signed with the same SHA-1 digest at $700,000 but predicted the cost to drop to $43,000 by 2021 due to Moore’s Law. A 2016 paper concludes that the attack might be able to be performed in a few months using rented Amazon EC2 resources for $75,000 to $120,000.
To summarize, SHA-1 has not been hacked, it is just simply not strong enough with today's computing power.