The graphical issue is that the WoW engine is a modified version of the WC3 engine, that was being developed as early as 1999, and has become a wildly inefficient mess of spaghetti code. So you have to apply an overkill of GPU power to play what is basically Playstation 2 quality graphics with HD textures.
To put that in perspective, the new Ashes of Creation build just switched from Unreal Engine 4 to Unreal Engine 5, and can handle 1000 player character models on screen in a pvp situation now without too much trouble.
As far as the server keeping up: WoW has trouble with that too, because of how it handles actions, and because exponents are a thing.
Lets say you have 2 guys doing 1 action per GCD. That’s 1 action being sent to the server, and then 2 actions being sent back to each player, so 4 out.
Now lets increase that to 40 players, and thats 40 actions in, and 1600 actions out.
Now lets modify this to a much more realistic 20 actions per player per GCD when you consider pets, procs, passives, movement, npc actions, Energy/rage/mana/CP generations and expendatures, consumables, off-GCD actions etc etc… many of which have to be calculated and which your not even aware of. 20 is probably a hard underestimate.
So that’s 20 actions in per player.
So with 40 players, each of which is performing 20 actions that have to be sent to the server and then rebroadcast to all 40 players, that’s 800 actions coming in to the server to be calculated and processed, and a whopping 32,000 pieces of information going out.
Now that’s a lot for a server to process, and why things like Southshore/Terran Mill just don’t work with the current system because it’s so inneficient.