No, Karabor was a mix of inside/outside. The reason they didn't do Karabor as a alliance city is because they didn't have the time they needed to finish it so they instead made it part of a few questlines as stated by the Devs themselves later on when asked why they "nerfed karabor". You could mount and ride/fly around most of it with the center of it being where you would be inside. Think shattrath in TBC with A'dal area.