It would. The lighting model in game engines makes a lot of difference. The shadows, the way the light bounces, the way the sky color bounces of the models, it all makes a difference, trust me. You add in ambient occlusion and normal mapping, and believe me, it will look tons better.
Also, I`d love WoW to have physically-based shading, even if for most of the people it would ruin the cartoony feel of the game.