I agree with you that they hurt themselves by trying to "trick" players into playing more with grinds and systems.
I think that is a terrible approach to making a game and I think it has hurt them a great deal and cost them a ton of potential profit $$$. They lost a lot of money on these grinds and systems.
I have a few out of the box ideas to increase engagement without grinds/ systems, etc.
How about: a good story with suspense so that people are invested in the NPCs and actually want to find out what happens?
Better use of gating- why does the raid just "show up" one day with all the bosses? It makes no sense for the narrative. How about it gets slowly introduced and is actually more entwined with the story?
You do the story and the quests and then you face the raid boss at the end. This "opens" the boss in the raid.
I know people will complain about attunements and other things......... For that I suggest having a lobby raid/ dungeon server. This could be for the players that just want to dungeon/ raid/ pvp without doing any quests, attunements, etc.
Many players just want to rush through everything to get to the "end game" and then start working on their min/max (some people are max level first day by rushing through) That's fine. It is just going to be really difficult to make a game that pleases: regular players trying to enjoy a game, streamers, players trying to rush through everything to get to end min/max, players going for e-sports, pvpers, etc...
That's why the game is a convoluted mess- they are trying to provide for all those different player types at the same time. Some of those are directly at odds with each other. A separate "end game" server that just provides access to raid/ dungeons/ without attunements and other things that make for cool story moments that those players just don't care about. Put the e-sports crowd on that server too.
* That's why I find it hilarious that min/max players will complain about the story. The story is lower quality because they are so limited on what they can do because of that very crowd. Attunements- nope can't do that. I just want to raid! What if one of my raid team didn't get attuned? Why does Blizz lock stuff behind these walls! Arrghhh! Your cov choice matters- no! Can't do that! What if one choice is slightly better than the other and I am stuck with the wrong one! Choices can not matter (in an rpg type game no less.....) Everything has to be exactly the same! Wait, this story sucks.... why can't they write a good story?
Literally makes no sense.......