It is an interesting question, is it not? It's one that I've thought of in the past and numerous others have commented on the official forum on several occasions. Blizzard's reply is that a certain amount of suspension of disbelief is required. They acknowledge the dis-jointed nature of the story from beginning to end, but that it was a simple reality of an evolving story. Where Larisa is focusing on the dis-jointedness of the story and the fact that we really are looking at WoW 2.0 at this point, I tend to focus my own criticisms at more specific aspects of their game design. I've mentioned before how unsettling I find these complete game mechanic overhauls every 24 months. While I can't dispute that some of that has actually been good for the game, taken on the whole I think it's actually not helped a great deal. Blizzard has not shown that they have a long-term vision for WoW and as a consequence the entire player experience has changed dramatically with every expansion. And here comes Cataclysm with it's dramatic changes, and combat and talent trees that are reminiscent of Vanilla WoW.
So, yes I ask myself where we go from here many times. As far as story goes I can think of many avenues down which WoW could head that would keep up occupied for years to come. Where the development strategy can go from here is an entirely different question.