I'm just not buying that.
The WoW team counts like 200+ heads, that's not a "resource" issue, maybe perhaps a lot of those heads don't get paid enough and due to that aren't very motivated enough, but payment is usually not the sole issue why workers aren't motivated.
If i were to put my money somewhere, then it's the fact the corporate enviroment has drained the fun out of developing video games, when developers are no longer able to pour passion into their games, it starts to show sooner or later.
Video games aren't something you just *produce*, creativity is necessary and it does absolutely not mix very well with corporate elements.
The other factor might just be brain drain, we've seen a lot of Blizzard veterans leaving the stage, who know at the very least how to get shit done, unless their replacement is top notch (which becomes more difficult with meager pay) then you end up in situation where you're left with a team that doesn't know how to get it done properly.
I really don't think it just comes down to Blizzard saying "Gives us more money, we could be making so much more!" and Bobby cackling "haha, i'd rather count my money now!"