Despite its problems–and I’m with you all, there are many (the post above mine, for example, has good points)–I’d submit that the franchise’s lore is largely coherent. I’d also say that the franchise’s lore problems don’t detract from it being THE prime source–the objective setting.
In my opinion, there are simply things that we can’t play with IF we wish to be lore-abiding. For example, you can’t be Arthas’ son. You also can’t role-play as the third forgotten Stormrage, the King of all dwarves, Lor’themar’s wife/husband, etc… If you do those obvious things, you’re not lore-abiding by any reasonable standard. Based on that, we have a means test for what’s lore-abiding and what isn’t–we have a standard to work forward from. What is lore-breaking is simply that which violates the rasonable standard.
Now, playing with gray area is fine–it’s LITERALLY what we are doing at all times when role-playing. THere is NOTHING wrong with playing with gray area. Be a noble of Stormwind, for example; just don’t be Varian’s secret other son.
In short, there are some things that are obviously lore-breaking and some things that are playing with gray area. When your lore contradicts the reasonable standard set by the objective lore, then we’ve come to a distinction.
And again, to be clear, if you want to RP a character that is lore-breaking, awesome; it’s your sub. fee. Just let people know that that is what you’re doing so the other person has a choice to go along with what you are doing or depart.