Moments ago Peter Jackson confirmed, via his Facebook page, that Orlando Bloom would indeed be reprising his role as Legolas in The Hobbit, at least for Part 1.  Says the man himself:

“Ten years ago, Orlando Bloom created an iconic character with his portrayal of Legolas. I’m excited to announce today that we’ll be revisiting Middle Earth with him once more. I’m thrilled to be working with Orlando again. Funny thing is, I look older—and he doesn’t! I guess that’s why he makes such a wonderful elf.”

Considering that he doesn’t appear in the book itself, it’s an interesting (if already heavily rumored) announcement.  Peter Jackson can do what he wants.  He can introduce a tap-dancing clown into these 2 films and I think people will embrace it.