You have confused the jhana states to a progression towards enlightenment. This was taught by other teachers before Buddha attained enlightenment and he was not satisfied.
"In this way did Uddaka Ramaputta, my companion in the holy life,
place me in the position of teacher and pay me great honor. But the
thought occurred to me, 'This Dhamma leads not to disenchantment, to
dispassion, to cessation, to stilling, to direct knowledge, to
Awakening, nor to Unbinding, but only to reappearance in the dimension
of neither perception nor non-perception.' So, dissatisfied with that
Dhamma, I left.
Nibbana is not the next level or realm after the dimension of neither perception nor non-perception. After attaining Nibbana, the Buddha could function normally to teach and interact with the people.
However, after his passing away, he is not reborn. However, does this mean that he does not exist after death? Or does he exist? You have assumed that he does not exist after death.
This question was asked in SN44.6:
"When asked if the Tathagata exists after death,
you say, 'That has not been declared by the Blessed One: "The
Tathagata exists after death."' When asked if the Tathagata does not
exist after death... both exists and does not exist after death...
neither exists nor does not exist after death, you say, 'That too has
not been declared by the Blessed One: "The Tathagata neither exists
nor does not exist after death."' Now, what is the cause, what is the
reason, why that has not been declared by the Blessed One?"
The question is turned around on the questioner. You can read the full sutta.
You wrote: "I have long held belief that you are consciousness, the witnessing."
This is also covered in the sutta:
"For one who loves consciousness, who is fond of consciousness, who
cherishes consciousness, who does not know or see, as it actually is
present, the cessation of consciousness, there occurs the thought,
'The Tathagata exists after death' or 'The Tathagata does not exist
after death' or 'The Tathagata both exists and does not exist after
death' or 'The Tathagata neither exists nor does not exist after
In this instance, one who is fond of consciousness, who does not know or see that consciousness is conditioned and subject to perish, would be concerned with the notion that the Buddha does not exist after death. There are many other criteria in the sutta, like being fond of the other aggregates (body, sensation, perception, mental fabrications), craving for becoming, clinging/ attachment etc.
The Buddha explained that consciousness is not eternal and is in fact, conditioned, in MN38:
"Just as fire is classified simply by whatever requisite condition in
dependence on which it burns — a fire that burns in dependence on wood
is classified simply as a wood-fire, a fire that burns in dependence
on wood-chips is classified simply as a wood-chip-fire; a fire that
burns in dependence on grass is classified simply as a grass-fire; a
fire that burns in dependence on cow-dung is classified simply as a
cow-dung-fire; a fire that burns in dependence on chaff is classified
simply as a chaff-fire; a fire that burns in dependence on rubbish is
classified simply as a rubbish-fire — in the same way, consciousness
is classified simply by the requisite condition in dependence on which
it arises. Consciousness that arises in dependence on the eye & forms
is classified simply as eye-consciousness. Consciousness that arises
in dependence on the ear & sounds is classified simply as
ear-consciousness. Consciousness that arises in dependence on the nose
& aromas is classified simply as nose-consciousness. Consciousness
that arises in dependence on the tongue & flavors is classified simply
as tongue-consciousness. Consciousness that arises in dependence on
the body & tactile sensations is classified simply as
body-consciousness. Consciousness that arises in dependence on the
intellect & ideas is classified simply as intellect-consciousness.
Think about it. How can the silent witness witness anything except through one of these media: eye, ear, nose, tongue, touch or mind? There was never a time, when there was consciousness being aware of something except through the eye, ear, nose, tongue, touch or mind. There is therefore no independent consciousness.
Consciousness is dependent on and conditioned upon these six media. It was a "aha" moment for me when I read that, and realized that the Buddha's analysis of consciousness is more accurate than Advaita's.
The correct view of what happens when one attains Nibbana is found in SN22.85 below. Rather than asking whether the enlightened one ceases to exist or exists, the right view is that suffering has ceased.
“If, friend Yamaka, they were to ask you: ‘Friend Yamaka, when a
bhikkhu is an arahant, one whose taints are destroyed, what happens to
him with the breakup of the body, after death?’—being asked thus, what
would you answer?”
“If they were to ask me this, friend, I would answer thus: ‘Friends,
form is impermanent; what is impermanent is suffering; what is
suffering has ceased and passed away. Feeling … Perception …
Volitional formations … Consciousness is impermanent; what is
impermanent is suffering; what is suffering has ceased and passed
away.’ Being asked thus, friend, I would answer in such a way.”
Is Nibbana such a sad thing? Dhammapada 203-204 describes it saying, "Nibbana the highest bliss" (nibbanam paramam sukham). All other types of happiness are temporary and subject to passing away.
As for your question "Is it not better to roam this samsara doing good karma and enjoying the benefits? That way you at least live forever through rebirths", we can find an answer below.
In Buddhism, all beings are not naturally progressing towards Nibbana. It is possible to be reborn as a Brahma, then later as a pig as seen in Dhammapada 338-343. So, there is no guarantee of continuous good karma towards good rebirths.
On one occasion, while the Buddha was on an alms-round at Rajagaha, he
saw a young dirty sow and smiled. When asked by the Venerable Ananda,
the Buddha replied, "Ananda, this young sow was a hen during the time
of Kakusandha Buddha. As she was then staying near a refectory in a
monastery she used to hear the recitation of the sacred text and the
discourses on the Dhamma. When she died she was reborn as a princess.
On one occasion, while going to the latrine, the princess noticed the
maggots and she became mindful of the loathsomeness of the body, etc.
When she died she was reborn in the Brahma realm as a puthujjana
brahma but later due to some evil kamma, she was reborn as a sow.
Ananda! Look, on account of good and evil kamma there is no end of the
round of existences."
So, is Buddhism nihilistic? I would simply say that it only shows you the path to the end of suffering. It is up to you to take it.