The WoW engine was developed by Blizzard and is modified over time. Each expansion and sometimes patches adds new tech to the engine. Weather effects, sunshafts, shadows, etc. These are all signs of a modern engine.
The minimum system requirements go *up* every expansion. Why would this happen if the engine is not being improved? This is also the minimum. If you turn everything up it starts to look really good. Once the player models are updated everything will be in sync.
Show me a few MMO's that have better graphics, perform at a high level with them turned up and can have 100 players on the screen with no lag? Rift? FPS drops to 25 because the engine is garbage? SWTOR? Same thing and there weren't even high resolution textures available before I quit. Tera? Nothing but complaints about crappy FPS on good computers.