WoW's current engine is based off of the Classic WoW engine, which was originally based off the Warcraft 3 engine. Considering the roots of WoW's current graphics engine, its damned impressive that they've made as much of it as they have. I don't know what you've seen of WC3, but it isn't terribly good looking, however for a game made in 2003, its up there with some of the best.
Not to mention that Blizzard design their games to be playable by almost everyone, trust me, there's tons of people out there with really really bad computers, i know a few my self that can barely run D3 / WoW on LOW settings.
Although the texture quality is crap, the "style" of the game is what matters to me.
And they do improve the engine every expansion, MoP content got pretty decent texture quality compared to old vanilla textures.
The x86 today is practically a disguised RISC processor as it breaks instructions into microOp internally. The only similarity between something like the 386 and modern i7/5/3 processors is the instruction set - even that has changed somewhat over the years. The internals have been revamped almost every generation, adding stuff like branch prediction, OOO processing (the Pentium was I believe the first Superscalar x86 CPU) ... etc. They didn't just "modify" an existing design.
That's exactly my point. The WoW engine of today is nothing like it used to be, just as x86 isn't.
Also the evolution of x86 absolutely took existing designs. Best example being Intel switching back to the Pentium M's microarchitecture to update it for the first Core chips, dropping the NetBurst MA that was being used in P4s. And they keep evolving the same designs to the point that they are no longer that which they started with.
A want a more efficient engine i.e. one that runs better.
That's what they're doing with Titan, and you can already see since the time that we've known about the project until now, that game hasn't even seen the light of day nor is it anywhere close to it. What does it have to do with WoW? Everything. Blizzard takes their time with game dev, in all aspects of it. Just swapping the renderer would take a lot of time and resource for a minimal upgrade in actual gameplay. Sure, the water will look nicer, but I'm pretty sure players are more interested in more content instead of revamping the world.
I mean look at Cataclysm. It made huge changes to the world, including making the entire old-world flyable. Everyone now takes it for granted, and the clear lack of content in Cata caused the downfall that hasn't recovered, even as good as MoP has been.
And yes, there would be a lack of content whenever R&D or a graphical change is needed. You still need artists to work on making the shaders for water, or generating the right maps and effects to make water splashes and reflections look good.