WoW started its decline in new subscribers and in bad game design when Wrath launched.
Subscriber Stagnation
It was the first expansion that was not reliably growing WoW’s subscriber counts, only replacing sub losses at a 1 to 1 ratio, with a small bump when the ICC patch released due to Arthas’ massive popularity. This means that Wrath was dissuading just as many players as it was persuading, which caused the stagnation visible on the popular subscriber graph.
“The Merge”
Activision and Vivendi Games merged to form Activision Blizzard in July 2008, just a few months before Wrath. This needs no explanation. We all painfully know this story. The base work for Wrath was not terribly influenced by this event, but all of the decisions following absolutely were.
Bring the player, not the class
Wrath was the expansion where Greg Street introduced “Bring the player, not the class” as the over-arching philosophy of raid design. This was the beginning of the mass homogenization seen in WoW’s class design to this day. This resulted in a loss of class identity, where the only identities players could hold on to from this point forward were raw number output, and the graphical representation of their class on screen. The effects in arena were similar, causing a lot of arena play to feel dull.
Heroic raids
Many other retail-esque systems were introduced in Wrath as well. We saw the first raid difficulty difficulty setting which ballooned into the Mythic system known today.
Heroic raids, continued…
Raid difficulty in terms of mechanics took a massive upswing after the introduction of difficulty settings, giving us extremely difficult Mythic raids which many see as being a product of retail. While I personally do enjoy a good challenge, I can still fully admit this kind of game play is a retail feature.
Microtransations
The beginning of microtransaction bloat began in Wrath (no, the sparkle pony did not outsell the entirety of Starcraft 2, that was poorly interpreted data) which resulted in the justification for the game to contain an ungodly number of mounts and pets. Someone recently told me there’s over 3,000 mounts in the game at this point in time. I can’t imagine caring about seeing any mount in retail at this point.
LFD, RDF, LFR
Looking for Dungeon and Random Dungeon Finder were introduced in Wrath, which eliminated any social aspect of formulating a group and also eliminated any open world requirement to travel to your dungeon. This later blew up into the deeply unpopular Looking for Raid apparatus, which is a hallmark of what people believe “retail” to be.
Achievements
Achievements were introduced in Wrath, which brought about a massive growth (I say bloat, due to the number of junk achievements) to the amount of instrumental play available in Wrath, which some criticize and being contrary to the spirit of an open world MMO. Instrumental play is defined as a type of game play that’s driven by explicitly listed goals to achieve, rather than choosing your own activities and adventures which is a hallmark of “Classic”
I’m sure there are more features I’m forgetting about, but this is pretty much the gist of it.
Post-Wrath
Later, you had even more egregious examples in the form of transmog, the destruction of Azeroth, and the Disney-fication of character models and animations, but for the most part, the retail ball got rolling with the launch of Wrath.