Inflation is defined as the general rise in prices for goods and services and lowered buying power of currency. Inflation undoubtedly has been happening (which is inevitable in any economy, let alone an MMO with infinite respawning resources) despite some items’ prices falling.
An economic crash would be (in real life) a “broad range of bad economic conditions, ranging from severe, prolonged depression with high bankruptcy rates and high unemployment, to a breakdown in normal commerce caused by hyperinflation, or even an economically caused sharp rise in death rate and perhaps even a decline in population.”
So bankruptcy, unemployment, and death rate don’t really apply to WoW, so those can be ignored.
The situation in WoW cannot be accurately described as a depression, as output is not being hindered and buyers are not drying up, nor is there deflation.
Normal commerce is not breaking down. People still trade plenty, and the inflation is not really “hyperinflation.” Yes, inflation exists, but not outside a reasonable rate. Items are not suddenly 2000x the cost (see: Venezuela).
The goods are more often overstocked rather than understocked. While there is a large degree of “hoarding” going on, that is to be expected in a game where people know all future content updates and what is needed for said content. They are still trading those goods, and not necessarily using those goods themselves to barter; they are still using the currency (gold).
You could argue there is an economically caused decline in population (I’m sure botters and the inflation have driven away some people), but that would be difficult to prove.
By any real definition, there isn’t an economic crash occurring in WoW. Are botters a problem? Sure, absolutely. Are they causing an economic crash? Nope, sorry. The economy is still functioning.