unless the movement begins to make some major changes like other contemporary institutions have, it is troubled times ahead.
I think your analysis is mostly spot on, but I don't think mainstream reforms are essential for the Watchtower's long-term survival. Have you considered the possibility that they might tear down their current eschatological structure and come up with an entirely new one? All they'd have to do is say "new light" and the vast majority of their members would buy into it. Sure, a few people here and there would leave, but that kind of a move would reinvigorate the religion and give their members something new and exciting to look forward to. They could find a new way to interpret prophecy that puts Armageddon no more than 30 or 40 years away. This would bring back the excitement that used to be present in the religion throughout its early history.
I believe there are two routes to assure the Watchtower's long-term survival: (1) mainstream reforms along the lines of what you suggest and (2) wholesale reinvention of their eschatological beliefs. The status quo cannot be maintained because they currently offer a stick with no carrot, sacrifices with no tangible reward. The first route would be the soundest direction to go in, from a business perspective. However, I believe, as you do, that the Watchtower leaders genuinely believe their own nonsense. Putting in place mainstream reforms entails recognition on the part of the GB that they were wrong, that the religion they believe in failed them personally and that they in turn mislead millions of followers. I don't see this happening. The current GB members didn't invent this religion. They bought into this stuff just like the rest of us did. Therefore, I think we'll eventually see the WT undergo changes involving a complete reinvention of their eschatology. It would be easier for the GB to implement those kinds of changes because it doesn't have to involve any admission of error. They could explain it away in their mind by saying that Jehovah allowed them to be mistaken for decades so that people could come to worship him and now Jehovah has seen it fit to provide his people with a clearer understanding of the truth, etc.
I'm inclined to believe that the next 10 years will see minor tweaks and growing apathy among the rank and file while the realization that major changes are needed begins to sink in at headquarters. The GB will be forced to come to terms with the fact that all their eschatological predictions failed. When that realization finally sinks in, it's entirely possible that the GB will go about the task of finding out what went wrong. For diehard believers who spent their entire lives within this religion, the obvious answer to that question will be that Jehovah allowed the GB to be in error for whatever reason, but now Jehovah was ready to reveal some deeper truth...through them, no less.
My basic point is this: I agree with your analysis, but I would suggest that the WT could shun mainstream reforms and still remain viable in the long-term.