Average crowds for the Falcons post-1992, after the move to the NEC, were in the mid-2,000s. They drew a few sellouts in the mid-'90s, usually against the Kings. Capacity in those days was about 4,200; it was increased to 4,600 in 1998 with the move to summer.
As to how popular and well-known they were, I'd liken it to how the Jets are thought of today - very much number two, but with a really passionate core group of fans. In the '90s, the Breakers (who eventually became the Jets, sort of) were in the number three slot, they drew comparable crowds to the Falcons.
From memory the impetus behind the breakup of the "Triple Towers" of 1997 was the collapse of their naming rights sponsor (they also sponsored the Breakers, so it was bad times all around for anyone who wasn't the Knights). Butch Hays went to the Giants too, but I think he came back midway through the '98 season.
Just before the first summer season they went into receivership, and there were two offers made to buy them - one from the biggest club in Newcastle, and one from a consortium from Albury who eventually had all their assets frozen by the federal government. Guess who the receivers picked?
That was a tough pill to swallow - they were on top of the table at the start of '98/'99, with the Johnson brothers and Hays in the backcourt feeding it to Pat Reidy and Ben Melmeth. Then Ben went down with an ankle injury, their second import (Todd Mundt) was sacked for punching Paul Rees, and it was all downhill from there.
I haven't heard any plans for the 2015/16 expansion window, and I think the NBL have already decided where they'd like the next four teams to come from, but I'm still convinced there's a market in Newy for an NBL team. The Hunters occasionally get over 1,000 to Broadmeadow, and that's in the Waratah League...