....If you say that Warfront,s Islands and Torghast(Lets also say Garrisons to be complete) all failed because they had no gear rewards, then you are GREATLY miss-diagnosing the problems of those systems O.o Especially since Warfronts and Islands had HUGE power rewards allocated to them. Just adding better gear to content, does not make it better O.o
The Mage Tower was played by a bunch of players when it came out and most importantly, it fufilled its purpose. It was never meant to be something that was mastered and grinded by the majority of players, it was something to try and test yourself. Most people in that period tried it and gave it a run, but in the end, it was content specified to a specific group of people, and you know what, taht is okay.
Besides, Torghast and the Mage Tower are not the same thing, does not try to do the same thing and very different targeted audiences. Torghast would not have been better if it had gear in it. People would still have been bored by it over time and the only thing that made it fun over time, was the quirky non-power elements in it, like toys and achievements.
To your final point, yes, if you take away gear from raiding and mythic+, it will fail as content. But that is also because it is designed with gear in mind. It is designed to be grinded, to be done over and over again for a slow increase in item level until you beat the final boss. Its also heavily group focused, with the primary barrier to entry being to get people around to do it. Taking gear out of these systems proves nothing, because its missing the point of making something with a specific purpose in mind. Just like gear is the core of raiding and dungeoning, you can also make content where gear is not a the focus.
Gearing is a core part of MMOS, but we are also not talking about removing gear from the game. We are talking about making a source of content where gear is not a the core of the content experience. That is possible, have been done before even by Blizzard themselves and can help to keep a game healthy, when big party focused content is not valid.
A final note here: If your primary statement was true, that gearing is the base component of RPGs, then RogueLites could not exists. They would be very unpopular since after the initial gain of bonuses, you would be more and more bored as the game left you with no rewards, and YET... That is not the case. Games like Enter the Gungeon, Hades, Slay the spire and vampire survivors offer no rewards in the form of gearing upgrade, but focused on creating an interesting player experience, by offering new a good gameplay loop, where the focus is on fun, personal challenge.
Blizzard can do this and have done with something like the Thunder Kings Treasure Trove and i believe it is well worth its development cost to make more of.