The game was in a fast sub increase curve over wotlk launch and it stood quiet after that. It was a defeat as they expected more growth that didn't come to be. I'd say it's because t7 and t9 were awful, and instead of actually making casual content they just made raids easy, and that didn't really work.
Well it is, raiders are pleased with raiding, and casuals are pleased with the amount and quality of casual content out there (tho it could be more). They never did so much casual content, and there's a lot to do now.And yet in current WoW, everything present should please every type of crowd, but it isn't good enough apparently.
Thing is, that's not everything. Thematic plays a huge role in "selling" the game, in keeping people engaged. Tbc and wotlk had incredible thematics, landscapes and villains. Damm, so did cata, which is one of the reasons it did better than it deserved. Now MoP thematic is very very weak, everyone knew that when it was announced, blizzard did oversight the importance of a strong and epic thematic.
Also there's the whole asia thing going on, which we don't actually grasp.