The question has been asked many times, "Could Blizzard make the gameplay like the amazing WoW cinematics? And why dont they?" Well we have been given an answer by Nethaera.

Could we? Most likely so. But that would mean limiting who could play the game. We also enjoy the style that we have and while we continue to make improvements, want to be very careful in how we go about doing it so that we can allow people to play without the need of needing to do massive upgrades.

Lets face it, they are far to busy counting all that money to bother with better graphics.

You can read the question and answer over at WoWblues.com