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Permanent magnets are magnetic because of what are called domains, groups of atoms inside the material whose magnetic moments are all pointing in the same direction. Their domains are all pointed in the same direction and so produce a net magnetic field. When you drop the magnet, some domains become disoriented and no longer line up with the other ones--the net magnetic field is weaker. Every time you do this, more and more domains flip and eventually the magnet is no longer magnetic. I think it is possible to remagnetize permanent magnets using an external magnetic field (flip the domains back into alignment) but I'm not sure.
Yes, you can remagnetize permanent magnets I think; I remember doing it in Physics when I was litte!
Yes this used to be so but modern magnets are made of much tougher stuff today and I don't think a modern one would come to much harm