Tried refreshing the toolbar. No luck.
Tried going to the Toolbar "Add Apps" page and adding a Bookmarks button back in. The little "loading" icon spun... and spun... and spun... and spun... and the button never loaded, even after multiple tries, including one spinning session that I let run nearly an hour.
I did find that the bookmarks hadn't totally vanished into the aether. (As other people had reported happening in the past, when I checked some various help forums.) If I went to my My Yahoo! page (which I have reason to look at maybe once every few years), I could still access the bookmarks, though only 20 at a time. Do-able, but a lot more awkward than the drop-down menus I was used to.
Next step was to try uninstalling and reinstalling the entire Yahoo! Toolbar. This meant I had to re-add various other buttons I use (Groups, Flickr, a few others). I tried adding the Bookmarks button again, but it still just spun in circles, forever.
So I went on adding back the other buttons. And when I hit the "Add App" for a Notepad button... all of a sudden the Bookmarks button popped back up on the Toolbar.
I gather that Yahoo! has been losing users for quite a while, which reduces their revenue, which means they've cut back on support for various features. This may have something to do with the problems I encountered.
So maybe it's time to start thinking seriously about dropping Yahoo! and going to some other provider for email, bookmarks, etc., before they do a GEnie and vanish completely. (Well, Yahoo! will probably continue to exist in some form for years to come. After all, AOL is still around... somewhere... I think. Isn't it?)
But I really don't want to have to go thru all the dead ends and non-working solutions I tried since last night, again. Because it's just a little...
Update, several hours later: Bookmarks button gone again.