Wikipedia is not a social networking site
Change anti-social groups to stop decline: The growth of active users has ended: the active-user counts are in decline, now, for numbers of active and highly active editors ("busy" > 100 edits per month). However, Wikimedia projects could be made more-friendly to help attract and retain editors, as explained in the related Talk:May_2011 topic:
The evidence tells me that the initial decline, in active editors, went into freefall when universities (and other schools) began to ban the use of Wikipedia (WP), by decree and by website-blocking within school computer networks. The "rise-of-Facebook-theory" fails to consider that MySpace (now "Myspace") and other large forums were no threat to WP, before Facebook, but the April-2007 drop occurred when major newsreports announced schools banning WP (and whole schoolboards banned Wikipedia use in hundreds of schools). Certainly, the novelty wore off, articles required more tedious sources, and users left to seek easier, new websites. However, the hostility within WP talk-pages is still a major factor, and hence, the reduction of "hostility" is noted as 1-of-5 issues for the May 2011 Strategy goals.
This is another pretty good theory I hadn't considered. If the problem is that Wikipedia went into decline due to restrictions at school, what's the strategy to fix it?
Focus on adult rules, while students banned: I think the school-based bans are fairly permanent, but there are some student-friendly plans for limited exposure to Wikipedia for young students. The focus now is to work with the adults as in: when life gives you lemons, make lemonade. WP needs to change into a non-juvenile environment, based on clear, fair rules, which adults would expect to find in a mature, professional system, where people can socialize within rules of order (overview: "#Stop Wikipedia as an Anti-social Network").
Adults expect to get w:parking tickets, or speeding fines, for small violations of the rules. However, English Wikipedia is twisted, now, to allow severe w:WP:ANI sanctions (1-month block for a veiled insult), rather than a system of "w:proportional punishment" (no article yet?) for policy violations. It is analogous to parking a car over the line, with the punishment as getting your legs broken, to protect the 'pedia. New social systems, for centuries, have had to deal with unfairness, and learn: let the punishment fit the crime (an "eye for an eye") and punishments for false accusations (the false accuser goes to jail, as in the w:Code of Hammurabi). Why? ...it is one of the Top Ten Evils: "Thou shalt not bear false witness against thy neighbor". So, it happens a lot. That is why I recommend to switch to the cadet system of demerits (offset by earned merits), where posting an insult incurs only 100 demerits, acting as a type of fee (or fine) from an account of merit points, rather than a monetary fine. When the punishments are smaller (and proportional to the offense), then there is no need for the witch-hunt, drama-shows at enwiki w:WP:ANI (where hysteria often rules the outcome). One of the social problems, which I had overlooked, is that several people who are casting judgments at WP:ANI are currently serving sentences: there is no clear line between who is a reputable judge and who is a "convict" perhaps casting votes as revenge for their current WP edit-restrictions. Reduce all the juvenile bickering, such as issuing simple demerits for offenses, and more adults will see a mature system of social interaction, rather than a childish w:WP:PLAYground where bored kids come to fight. Change to a system where adults want to stay and edit articles, and that will reverse the growth above the bottom-limit of 3,400 highly active editors, where the decline is headed this year.