I can't pretend to know why they are quitting. But I can tell you why I think interest in WoW in general has waned. I don't know how much this explains recent trends, but I'm just kind of throwing ideas out there.
- The solo and 5-man content available was cleared and made trivial within a month after Wrath's release. Nothing new was added (the argent tourney is an extremely tiny bit of grindy stuff) in all this time. All there is to do in the game now is raid or PvP. Anyone who wants to do solo or small group instancing is out of luck. It's almost impossible to even get groups anymore, because everyone is in Naxx gear or can get Naxx gear the day they hit 80, so few are motivated to run heroics any more.
- Adding to this, alts are less appealing than they used to be. Players don't feel stalled-out on their mains like most felt at 60 and 70. If you were in a Kara guild, you could level an alt and bring it to Kara. Nowadays, the prospect of getting another character ready for Ulduar makes my brain bleed, especially since the fastest way is "grind naxx pugs" rather than run varied heroics. Perhaps more importantly, your collection of achievements, mounts, vanity pets, and reputations don't carry over between characters, making the idea of playing an alt even more disheartening.
- For the first few years, WoW was full of possibility. If you didn't like something, the game was always in a state of flux and improvement, adding new features, etc. Nowadays, most of the game systems are firmly in place, and they've set about merely refining and strengthening them. Everyone knows that 3.0 was a massive balance and game design pass that redefined the game. It's also clear that there won't be a similar shake up again for a long time. If you are unhappy about things, they probably aren't going to change much.
- You are encountering a lot more stupidity and childishness because you are pugging more raids. It used to be that you had to save your raid ID for your guild. Now, there are so many raids any one character can attend in the same week that they end up pugging them a lot more, and if you've paid any attention to the community, you'll see that complaints about other members of the playerbase have skyrocketed. I can't say whether WoW has a shitty community, but I can say that it is so huge and the game appeals to such a massive variety of people that we are going to constantly encounter people we can't stand. The more exposure we have to others in larger and large pugs, the less we will like the community. We won't notice the quiet, nice people; we'll remember the douchebags.
- The game has been out a long time. Maybe we are all finally just getting tired of it.
So I'm gonna say that my hypothesis is this: the game is floundering because heroics and raids are too easy.
Please don't confuse this with my thinking that accessibility is bad, or that only the hardcore should see raids.
I LOVE the accessibility mantra. I want everyone to get to see Illidan or whoever. I like the new design philosophies about making the barrier to entry easier for raiding, and getting the playerbase at large involved, and showing John Q. Average how much fun raiding can be.
My problem is one of degree: they made it too easy. They could have made it quite accessible without making it a faceroll fest.
My own guild is suffering due to this. We are clearing deep into Ulduar and trying out hard modes, and that's a blast, and a massive improvement to running Kara and ZA over and over because we didn't want to play with 25 people. But we have little to do in between raids. We sometimes work on heroic achievements, or do some PvP together, or go blow through some old world stuff for shits and giggles. But all we have left in heroics are the super-hard achievements (specifically Less-rabi and the 20-min Occulus run), which are more frustrating and less than exciting after a night of wiping on Yogg or Steelbreaker. It's making it very difficult for us to keep interest. We can keep our guild community going if we go out of our way to organize "fun" events together, but it's not like it used to be where there would constantly be groups forming to do different tasks that the members were motivated to pursue for the rewards. Put simply: we are out of things to do except raid Ulduar. Since we have a 3 night a week raid schedule, but most of the guild likes to play every day (just at different times), this is really frustrating.
For one thing, we really need a "Legendary" or "Ultra" mode for heroics that raises their difficulty and drops Valor Emblems and ilevel 213 gear to compensate for the added challenge. They shouldn't even be mathematically attemptible until you are in full 10-man or heroic epics.
Naxx can't really be retuned at this point, but I think upgrading heroics will help.
Third, there should be some way to encourage alts beyond shortening the amount of grinding you have to do to level them (heirloom items, RAF, etc). These ideas would need to be fleshed out, but for instance, you could allow all characters on the same server to share all achievements (or just certain ones). Another good thing would be to allow your main to share some rep rewards with your alts, such as helm/shoulder enchants. Or even give someone a reward that applies to their main once an alt on that server reaches 80. Perhaps when they ding, they get a mail with a bind-on-account mount or something that gives their main a new title, or even gives them a token that let's them choose one reward from a list of items, perhaps even BoE epics or even just flavor items. I don't know, just throwing ideas out there. It would be nice if there were more incentive to roll an alt now that raid progression is easier and 5-man heroic groups are harder to find.
But alts are really secondary. The main thing is that Blizzard needs to get people into smaller groups with their friends again, instead of setting up rewards so that every single person on the server is constantly pugging raids instead of doing 5-mans.