Running WoW and anything else can max it at 8GB. Your OS is smart enough to manage it's memory by swapping items that don't need immediate access and disabling swap can cause unnecessary crashes.
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The reason this is faster is because your USB drive is faster than your primary HDD. So you're substituting a flash drive for swap space versus your regular drive. If you happen to have a SSD (which you were trying to avoid) the readyboost option is disabled.
Adding more ram would decrease your chance of needing constant swapping but depending on price a USB drive might be cheaper. Ram would be a better overall solution. 8 GB is practically the low end of system requirements today.