1. The riot about the dance studio was mostly tongue-in-cheek. Players bring up the dance studio as a joke, not in earnest protest usually. Even Blizzard was in on it, and it was likely their reasoning for implementing this.
2. This is not the dance studio that some people actually wanted. The dance studio advertised before was going to have the ability to change the way your character /danced, which is why some people were always interested in it.
The WoW community is shit but this really isn't a good example of that. This "dance studio" serves no purpose within the game whatsoever and doesn't really benefit anyone. And since it's kind of immersion-breaking (neon lighting in a medieval city and a primitive desolate hut? what???) it very likely won't even really be that useful for RPers.
hmm you have a point
Maybe would be better if they introduced brothels. Kind of seems more suitable to the setting