The cartoony graphics are simpler than the average attempt at photo realism, but on the bright side that means that the system requirements are much lower. You can run WoW with a relatively low spec computer. Convincing someone to play the game is so much easier if they dont have to buy a new computer =]

Bringing off photo realism is very hard since humans are rather good at seeing the make believe humans move incorrectly. Wooden horses anyone? Even if it looks awesome standing still or if you have nice spell effects, bringing off realism is made harder by the movements. If that is messed up it will spoil the realistic look anyway and you are back to square one.