Blizzard doesn’t want to have a server that doesn’t even have half the population of a normal server back then (1.5k) or even a quarter of it. They were open to the idea of them with Vanilla Classic but since Vanilla Classic largely failed with it only retaining 2 raid group iirc after TBC Classic launched actually raiding while the rest of the servers were dead until the hardcore community made use of it.
They’re invested in doing seasonal content with Classic (SoD) and with no TBC Era servers it was kinda of a given (at least to me) that there’d be no WotLK Era servers. Which is a shame but personally I don’t really mind since I wouldn’t of played WotLK Era if it were an option.
You’re right they can exist at the same time, I don’t think anyone is trying to refute that.
It’s a valid argument, there’s 5 versions of WoW with Retail, Classic Era, SoD, Hardcore and WotLK. Adding more WILL fragment the playerbase more than it already has.