As you say, people usually quit in groups because nobody wants to play anymore if all their friends have stopped.
Basically my entire guild quit the game shortly after WOTLK was released, but for every people who stops playing, either a new casual player wants to try the game or an old WoW veteran is drawn back by nostalgia. If you check out the WoW subscription numbers, they've been remarkably stable since WOTLK.
Another thing we shouldn't forget is how much we've changed ourselves. Personally I like to complain about how WoW isn't like in the "good old days", but thinking about it, it's probably mainly because I'm out-MMORPG'd. When I finally cancel my WoW account (probably soon since I'm not really playing the game anymore), I don't think I'll go on to another MMORPG, and I believe a lot of other players feel the same way.