Let me start by saying I think this is a great topic and a great thread.
I think the Fetish stuff will continue to grow as we slowly (very slowly) loosen our collective knickers from the Puritanical stranglehold on sexual mores that has existed since this country's founding. Attitudes toward sexuality in the U.S. are still extremely uptight, but look at how far porn has come in a generation: from seedy movie theaters in Red Light districts to a completely democratized (not to say amateur) online Pornopolis in what, thirty years or so?
Still, as a whole, the industry is declining, at least in its mainstream manifestations. The heyday of porn from the mid-90's to mid-2000's (big production companies, exclusive stars, $40 DVD's) is decidedly over. The internet changed everything, and piracy now seems poised to destroy mainstream porn completely. Look at the decline of a company like Vivid, for example. This will continue unless & until companies can figure out a reliable way to monetize the new digital media experience, instead of selling one subscription and then seeing their material be illegally distributed to tens of thousands of people for free.
This more than anything, I think, is the reason most of the mainstream stuff continues to go "extreme," with Bukkake's, Anal Gang Bangs, DP's, DPP's, DAP's, and even TP's (e.g., Juelz V. in GB 5, Lily Carter in POTY 2013). Anal prolapsing ("Rosebuds" or "Pink Socks") is even a subgenre of extreme anal penetrations. I think the industry is risking more and more in a last gasp before total burnout. I can't exactly back this up with numbers, but I'd be willing to bet more and more stars are pressured (required, really, if they want to get into the biz) to do anal in their very first scenes.
Don't get me wrong. I hated many of these companies. They ripped off consumers for years with bullshit like repackaging old scenes (not Best-Of compilations, but "New Releases"), and according to pretty much every account I've ever read, the working conditions were deplorable. They treated stars like dirt, cleanliness and STD testing were unheard of, and the only thing that made up for it was that being a performer paid pretty well. So I'm not exactly upset to see some of these companies get their just desserts.
The downside, however, is that all the Solo/Amateur producers out there rely on an energetic industry to fuel its distribution lines, etc. Without a healthy network of vendors (your Lion's Dens, and so on), how do smaller businesses get their product to market? Advertising online is extremely expensive, and in the end, small producers are just as susceptible to piracy as the big companies.
I guess my point is that while all of the so-called porn genres and subgenres are gradually gaining more acceptance, the "industry" may not really exist much longer, making all of the various interests both more popular and less successful at the same time.