Several problems.
- Blizzard knows it would be a bad look to condense servers so they went with the mechanically circuitous method of linking them together and allowing for more cross-realm functionality. Squishing servers would also come with some problems as well when squishing characters or guilds with the same names, I imagine.
- Dornogal is sharded to heck and back. Blizzard wants to make sure the current expansion content feels smooth. Because of WoW’s server infrastructure, if too many players are in the same shard of a world server the game basically becomes unplayable. Since October, MG’s Stormwind is basically unplayable with a 2-5 second lag time because of the sheer amount of people there at a given time.