They were greatly feared and respected in Oblivion. Will they ever recover from losing all but one sanctuary?

Trying to be vague, but I would guess that the end of the questline would do wonders to increasing their presence in Tamriel. The questline doesn't end with a wimper, storywise.

Depends on which decision you make in the game is the official one.

Luke Skyrimmer is correct. Sorry if you people haven't finished either of the two possible storylines, but being vague is going to prevent real discussion. One option is to actually destroy the Dark Brotherhood. Technically, Babette, Cicero, and maybe one other (Nazir?) aren't present when you go to destroy the members of the Sanctuary, but you still basically destroy the Brotherhood. As Bethesda illustrated with the Warp in the West business, they don't like to arbitrarily make one quest outcome non-canon. Therefore, there are only a few options for TES VI that would allow for both outcomes:
1. After encountering some 'troubles,' the DB was able to regain strength and assassinate the Emperor (not necessarily in that order)
2. Sometime during or shortly after 4E 201, the Penitus Oculatus destroyed a Sanctuary. Some escaped and went to another Sanctuary, but that one was found too. Also, the Emperor was assassinated, but nobody knows by whom.
3. Having happened a few hundred years ago, nobody really knows what occurred. What's Skyrim?

I guess that Bethesda might just 'ignore' the 'Destroy the Dark Brotherhood!' quest lore-wise, but that might make some people unhappy.

Wouldnt know - I killed the lot of them. Playing Good (No stealing, pickpocketing, etc)

Lol, "good"... In order to kill them, you have to complete Innocence Lost by killing Grelod. She was a jerk, but is listening to a crazy little boy stabbing a desecrated corpse with a nightshade-doused dagger while praying to an occult idol really "good?"

The idea of them having sanctuaries or "Dark Brotherhood Armor" is horrendous to me, so whatever it takes to remove those ideas from Bethesda heads is a beautiful notion, not matter how many hits of acid it takes.

Take illegal drugs until you stop thinking those thoughts about the Dark Brotherhood. Do it for the fans, Bethesda.

Why? What's wrong with the Dark Brotherhood having conspicuous uniforms and functional bases?

They aren't exactly some kind of secret organization like the Blades or Illuminati - They are a business, with a profile about as low as McDonald's. If you want to sell a house, you call ReMAX. Want to exorcise a house, call the Ghostbusters. Want a meal at your house within 15 minutes, call Dominoes. Want your neighbor to stop bothering the world with his existance, call the Dark Brotherhood.

Like any other business, the Dark Brotherhood also use uniforms for the same reasons - It de-emphasizes or outright eliminates the individual's unique identity, replacing it with the company's brand. The Dark Brotherhood doesn't use stealth to remain secret - That's the opposite of what they want to do. Instead, they use stealth for two things - ensuring the kill, and protecting the operative.

So... yeah, Dark Brotherhood armor is quite practical because it's so distinct.

I miss the days when Dark Brotherhood was a mystery, and joining them was a pain.. And if you refused after getting contacted by them, they would send assassins out after you from time to time to "silence" you (Kill you)

The last TES games have been "You wanna join us?" "No?" "Okay maybe this aint for you"

I'm confused, are the "other" options with the Dark Brotherhood reliant on you killing everyone or not?

I'll say two things here,

1. It would be nice if they actually have a Shadowscale who doesn't frickin' die for once. There's too much potential for interesting lore (and not to mention that the current lore feels too incomplete) surrounding Shadowscales IMO for it to be relegated as "junk lore."

2. How many times can the Dark Brotherhood possibly have a downfall? Seriously, they've done this in some shape or form for three games in a row.
Now, as for how there could be Shadowscales besides Veezara? I don't know, maybe a few previously unrealized survivors, maybe the new leadership of the DB