How can you tell if a faculty or group is on decline? Am I being used?

I am currently deciding graduate school between several different groups in my school's engineering department. A few faculty in electronics, signal processing and control system has expressed interest in working with me.

When I talk to some of the current graduate students, I get a wide variety of opinions. What bothers me is that some graduate students tells me that a certain group is on "decline". They rarely clarify what this means, but to me it can mean several things.

1. the output from the group is inconsistent


2. funding is lacking


3. output is not applicable to come up with a product


4. (follows from 3) work too theoretical and deviates from engineering goal

If a group is on decline, then regardless of the reason, under normal circumstances I will not even consider joining. What surprises me is that this group which has been rumored to be on the decline is very keen on recruiting new graduates. In particular, I have experienced more of a "pull" from that particular group than any other group which has expressed interest. There are early admissions, talk about funding, offer of teaching assistance-ship. I am starting to wonder if they need me so to acquire more funding for their own research or if there are some other ulterior motives.

Can someone who works within academia clarify on what it could mean for a group to be on decline, so much that it is apparent to people who are outside of that group.

Also what interest me personally is what ulterior motive could a graduate unit have in recruiting new graduates aside from the expressed interest in publishing more beautiful papers.

Thanks