You are correct that the much faster kill speed in a group makes up for the lower experience. To be honest, I think it is more that you can see the exp bar moving when you are solo and it feels as if you are progressing, whereas the exp bar creeps along with the five-person group so it feels slower. It is probably also from the content being pretty old. I've leveled... oh man, dozens of characters through the 1-20 portion of the game, and at least three or four solo to 70/80. Northrend may not feel so bad because it is still somewhat new to me ("only" leveled two characters to 80, and only one character has really seen all the content, as my "old" shaman dinged 80 while still in Sholozar I think).

For a pure questing group that hits Outland at 58 and Northrend at 68, the gear upgrades are meaningful. I agree that the difference is much more notable when entering Outland, because the non-raid gear prior to tBC was awful and Blizzard also wanted to 'reset' the gear gap. The better planning made it so that WotLK did not require such a big gap. My level 80 shaman still has a lot of Karazhan gear (also leveled via quests, no instances in WotLK). On the other hand, one of the first quests in Borean Tundra upgraded the hunters from a 55 DPS bow to a 73 DPS bow and another quest shortly after that upgraded it to 76 DPS. The shaman with this group also replaced a dagger with something like +59 spell power to one with +173 spell power! The best part is that I think the gear in WotLK is better coordinated. The hunters looked like clowns after gearing up in tBC, but they'll have a more consistent look before very long. Why this matters I do not know, since they spend most of their time in tiny windows on my desktop.