So, some folks in the comments have suggested that #2 is already occurring. I was thinking about this the other night. Software has life cycles and one of WordPress' important pieces to its success is the backwards compatibility component.

The easy solution to me would be to create a fork of WordPress and label it Legacy but Matt M. has said in the past and has indicated that he doesn't want to build and support more than one official branch of WordPress if he doesn't have to.

So with that solution out of the equation, if WordPress continues on its current path, how long will it take before it becomes so enamored with being backwards compatible, that all forward progress stops? Developers become too afraid or can't find an alternative to make any changes due to whatever number of sites on the long tail of installs might break.

Microsoft Windows comes to mind in that they're so focused on backwards compatibility, it doesn't give them room to innovate with newer, modern technologies and techniques. The luxury Microsoft has that WordPress does'nt is that they have specific products/versions that they can EOL. You can't EOL WordPress because it's one product encompassing all versions.