(Related post: Raiding does not mean Skilled)
World of Warcraft, and every game like it, is really two different games. I first read this thought at Penny Arcade (can't find where because their search function is weak). Basically, you have the levelling game where you start at L1 and then play until max level (currently L70), and then the game that happens after the levelling game, which is filled with group activities of all sorts as you improve your max level character.
I've been reading Tobold and Potshot lately. They're talking about loot and game design as it relates to endgame guilds, specifically guild hopping and progression problems due to it. I haven't seen a decent explanation of the problem, but as a guild officer/leader I've seen it in action twice now, once with the original WoW endgame and now with the TBC endgame. I don't have a solution, but I can frame the problem.
For me, the most fun time in WoW is right after an expansion hits, when there's limited collective endgame exploration. All the content is new and fresh, then I find myself grouping with not just my long-term guild friends, but also my friends who left to get on the progression roller coaster. It's glorious! This is what the first two months of TBC was like.
Then, endgame progress starts to happen, and a tiered system begins to form.
The game indicator of winning in WoW is receiving an epic item. In vanilla WoW, the vast majority of epic items came from 40-man raiding. I'll grant that there was an epic hunter quest, a few limited crafting bits, some world drops, and a top-level pvp set that only a handful of people could get. But overall, if you wanted a reliable way to get epic gear (and win), you hooked up with a raid guild and started raiding… whether you liked raiding or not.