Well, they did a pretty major reboot with Cataclysm, and every new expansion that changes the graphics there are some fixes, but I agree, the engine is kind of creaky by now. A total reboot would be a good idea, if they can resist making signficant changes to things like in game action and interface.
In this thread there is a great suggestion on how to do that: the titan inside Azeroth hatches and destroys the world, then its rebuilt from the Emerald Dream (without the titan) and you rebuild.