The summary:

Three basic reasons about why the choice of local servers will create problems beyond what’s expected:

1- It pisses off the community. Aside the fact that this point is obvious, there’s still the concept that, in the “age of internet”, instead of removing barriers between the users (this should be the very first aim of a mmorpg) we are creating more and more “walls”. I consider this the most critical part for a mmorpg and it’s disappointing to see the approach taken by Blizzard.

2- It creates direct problems for every player on every server. Even Walter Yarbrough (Mythic’s content producer) underlined this point:
“WoW’s population peaks and valleys will be worse than most other MMO’s out there. / Having a worldwide server – like EQ – means that population lows in Europe, East Coast, West Coast and Asia don’t coincide – the servers remain relatively populated as players log in and log off throughout their peak playing hours. / WoW won’t have that – when they are at off-peak, they will *really* be off peak, and their server populations will be very low.”
This makes the server (every single server) overcrowded during the peak hours and deserted during most of the day. This makes the game less playable for everyone. The “life cycle” of each server for each day is strongly reduced. Putting a barrier between the two coasts will make the situation worst. Not only it may shatter the various communities, but it will make the population jump up and down even more roughly.

3- The choice will require Blizzard to deploy more resources and, so, spend more money in proportion with the number of subscribers. Why? Because a local server will “saturate” more quickly than a worldwide server. It means that a single server will reach its “top capacity” sooner. The number of unique accounts that each server will hold is reduced and Blizzard will need to push out and mantain more servers even if for the same number of paying subscribers.

This means that this is a terrible choice for all the “three parts” involved:
– The community is pissed off.
– The gameplay is damaged.
– Blizzard will spend more money.

So, why the decision has been taken if there are only bad (and relevant) consequences?
I can find only a reason:
– Blizzard. They are pushing and investing on Blizzard Europe and they don’t want the european players to migrate to the USA when the USA version will be released ahead of time. Blocking foreigner accounts will help to promote Blizzard Europe (and other regions when they’ll launch) avoiding the leak of users to the USA.

The rest could be about marketing strategies that Vivendi may impose on Blizzard (trying to not kill the sales on Europe). But the point is somewhere else. I’m an idealist and I believe that any choice that will damage the game (and this one will) must be ditched. Not only because the game is the focus and the money the consequence, but because if we damage the game we also damage the quality of the product. So the money again, recursively.

The other aspect is about a ridiculous idea of the market. The market should REACT to the demand/offer, instead, in this case, the market seems to force the demand. If the european players will leak to the USA servers without going back it means that the demand for a localized game and server *doesn’t exist*. So, there are two ways. Or Blizzard considers this fact and realizes that they are wasting money on Blizzard Europe for an offer that isn’t present. Or they accept the European market for what it is. Leaks of players to the USA included. I strongly believe that the “demand” for the european localized servers is STRONG and the leak of players to the USA won’t prevent Blizzard Europe to be successful.

On its own merits, not because of forced rules.