I don't begrudge Blizzard's success, but sometimes I think the MMO world would have been a much cooler place had WoW capped at like 500k subs., everyone and their brother weren't chasing that WoW money, and developers (and players) could be happy with a couple hundred thousand people playing their games.
The end result would have been the MMORPG genre shitting itself had that happened. Investment costs were skyrocketing (Unfortunately some of that can be pin pointed to horrible producers) and a lot of target market for this was growing up. In 2003, the market was thought to be capped at 500k by most everyone, and a lot of the nods to make some games would have been shit-canned had it not been for WoW's success. I am not saying it would have destroyed the market, but without WoW you don't see other attempts which was, at the time, some risky endeavors for this genre. TSW, SWTOR, whether liked or not, had some unique storytelling ideas (SWTOR) or player/combat advancement/Atmosphere (TSW). Obviously there are others.
We all long for that long leveling curve content model again with the building of a community and knowing who people are on static servers, with a real world atmosphere and dungeons which aren't instanced. The problem is we only see the good days of EQ1, which were those aspects, but forget sitting on our asses for 3 hours a night doing nothing while looking for a group or travelling to get there. As much as I would think it's cool, chances are you wouldn't see me there. With limited times to play games, I am not going to go back to a model like that when I want turn on and play. Yeah. If I was 23 again, single, and all I did was either decide for the weekend if I was playing games or hitting a bar, or both - coming home at night to play more games if I wanted, sure. Those days are far behind me.
Anyway, I disagree with your point that we would have seen better niche games had WoW sat at 500k for it's life. Publishers would have said if Blizzard can't do it, screw this genre, we will make something else. Or it would have such a low end budget we would be playing DIKU-Mud replacements running horribly with basic systems at 2-3 year stints.
Either way, aside from some classes and a few folks that want to venue back to the years of yesterday with static dungeons; this game was a textbook example of why relic managers/publishers in this genre, which has been completely incestuous so we never see any new changing of the guards, needs to go. Once that happens (Which I doubt it ever will) we will see some truly new innovative games with fresh ideas above and beyond Molyneux paper dreams or trying to sell a game based on futures of technology which do not exist, has not been tested, and out of in house publisher control. (EQ Next/Landmark/Storybricks)