People have bought gold since Vanilla. There was a lot of account theft happening by gold sellers. There was and is still a gold farming bot problem. There was also a lot of problems where people were selling in game items/services for real money.
Blizzard came down hard on Real Money Transactions. And buying gold from gold sellers. But, no matter how much clamping down they can do, the demand would still be there.
So they made a means to purchase gold for in game cash through blizzard. It was necessary and the right thing to do.
The cash shop, is simply that. A easy way to add revenue generation to the game.