Maybe extinct; maybe not. We'll see.
This will mirror what I will say in the Falmer thread, but I too hope to find some small remnant of them, in some remote ruin. As they are not playable, I would expect and be fine with the Devs just tinkering with one of the other Elf races (most likely Altmer or Dunmer) until they get a distinctive look (one still achievable by the player if they play around in the customization on another Elven sub-species enough) say white or pale blue hair and skin etc.
I thought it unfortunate that we ran into none of the Aylieds in Oblivion. . . or maybe we did and didn't know it, though I don't recall many distinctly wild Elves. According to lore they would be paler than dunmer, but darker than the Altmer (and possibly taller?). They Aylieds, despite what some have said, are not extinct, they merely became wild or merged into Altmer and Bosmer populations.