To be honest, any one of the above could happen, depending on their own actions. I notice there's some small splinter groups still around that broke off the original Bible Students, who had in turn broken off of a whole Adventist movement that was fairly popular in the mid 1800s, so it could go that way, with them becoming a more and more obscure splinter group with a few die hard loyal adherents. The fact that they have such a poor rate of retention among their new generation speaks volumes. They can't attract nearly as many young people who have a lot more ways to break through the isolation and lack of alternative information required to keep the Witness power base intact.
If they keep compromising their more "out there" beliefs to get the legal and financial heat off of them, they could end up more mainstream, but since that's one of the main appeals of the religion, their doctrinal differences from Christianity, one they're always harping on and are so proud of, they risk losing the die hard faction, but may gain more of a looser, less committed following. The more a religion demands of it's followers, remember, the more fanatically loyal they tend to be.
Extinction is a real possibility too, as there's a general decline in certain kinds of religion in most of the first world, even mainstream religion. We're transitioning to a rather decadent period in history, or at least Europe is, (America is a bit behind, which is why we still tolerate more religion, especially unsocial ones, than Europe does) which has less use for religion now unless it's either non threatening and traditional or else quite modernized to fit modern sensibilities.