They literally do update their engine and core software.
Go and play Classic WoW, look at how the game feels, how it plays, the animation quality, the visuals of the zones, etc.
Then go and play Retail WoW and compare.
The huge differences between both versions are because of engine upgrades and core software upgrades. Advancements and updates are what have allowed Blizzard to implement Dragon Riding (something that would have been impossible on the classic engine). Player housing is another thing that is only possible now because of engine advancements and upgrades.