Its been, and is, one of the most requested features to be added into the game, and not recently, since vanilla wow, this has been a request from the player base. Its is a highly popular aspect of many online games, and the fact wow does not have it, is still amazing to me.
Its well past needed, and it is not going to be a thing that would be all you would get for an exp. Raids would still happen, dungeons would still be there, new zones and content. This would be like what battle fronts were to BfA, or what Thorgast was to SL (Not in the quality of them but the concept) they would be expansion features added in, it would not be the meat and potatos of an exp, it would be the sides that come with it.
Its very much needed because not only do players want it, it would provide wow with very much needed evergreen content. Housing would then make relavent past dungones that could drop crafting recipes to make various items for a home.
It would make every single past exp resources once again valid and usable, iron, copper, gold, adamantium, ghost iron, Titan steel, ect ect, all could be once more made relevant to the entire wow community as a whole.
It would also provide every single profession a wide array of things to make for players who want to do the player housing system. You can now go out mine, and then build some sort of thing that a player wants, so now you are not forced to just make some sword or some little one item that people use.
It sounds like you are looking at this only though the lenses of “Well this would take a lot of resources for someone just to play house.” and not the lens of “This is a system that could be utilized by everyone in the game to give them something to do and make old content relevant.”