The huge imbalance of Blood Elves is definitely known by me as a Horde player, most of the Horde on my server are Blood Elf for some reason. While I'd love to pick the brains of players who choose to play as them over every other race in the Horde the reasons seem pretty obvious to me.
Firstly I think it's because they're the prettiest race of the Horde going by the usual concept of beauty most people are brought up believing in, particularly girls. While it not might appeal to most males the idea of playing as a barbie-esque elf or a effeminate boy-toy is probably too hard to resist for most female players when there's no other real option if you want to play with your Horde friends. The same goes for Alliance and Human/Night Elf females.
I feel this concept of beauty extends to the role-playing aspect of the game as those who don't feel they're beautiful in real life want to identify with what they idealize and want to be, and that's absolutely fine. Personally I couldn't be happier with my real life appearance and I feel no need to play as a traditionally beautiful character. I play a Troll.
From a lore perspective I think Blood Elves are pretty cool though I appreciate High Elves a whole lot more. It really just is the difference between purity and corruption even though the Blood Elves never asked for Arthas to fuck their whole nation up. I also see a lot of Blood Elf Death Knights around and I like the concept of that race/class combination. There would bound to have been plenty of elves risen by the Scourge after their invasion of Quel'thalas and Archerus is in the perfect location for it to make sense for them to start their journey there.
On the concept of playable High Elves honestly it would make more sense for the Blood Elves to be cured of their corruption (how many years has it been since we took back the Sunwell again?) and for the Silver Covenant to return to Silvermoon. Literally the only thing Blizzard needs to do is give players the option for Blue eye color and move some npcs around. Not a big deal and it makes sense from a lore perspective. They'd still be Blood Elves, just purified ones.