Well, first off, it's not the WoW formula but I understand that's what most people associate with it.
Loot carrot has been around since PnP D&D if not earlier and in MMORPGs before WoW, and CRPGs before there were MMOs...and *gasp*.
Nobody is going to play forever. You hope that the good friends you make mixed with plenty of good content and things to do keep you going for a long, long time, and that the developer of the game doesn't mutilate the game and make into something else while you're playing it (bliz with cata and incessant gutting of core elements of WoW, for ex).
IMO, you don't have to have the loot carrot. It's a tired mechanic. GW2 does have loot, it's just not the focus. So many good things about it:
- no reliance on random rolls and farming content where you may never get the item you want. some people like the loot lotto. I despise it. I tend to play a lot. I've been in situations where I raided 7 days a week and hit the same raid every day for weeks on end and never got drops I wanted. I don't want to be handed loot, but I do want to feel like I'm not wasting my time or that effort is rewarded with luck. Rewarding time and effort with luck is a bad equation.
- no overpowering and eventual obsoleting of content via gear - you will have to beat it with skill, not overpower it with gear - you will learn and master content due to being a good player, learning your profession, the content, and teamwork, and the "we can't do this, let's come back when we have better gear" thing isn't a factor or a possibility. The only option is to become a better player. Encouraging people to be better players is a good thing - the potential is usually there but many will take the easy route when it's available. (side note, I dislike powerleveling and cheesing content with high level friends too...and this isn't possible in GW2 either, you can't just say, yo, grab your 80 and run me thru X lvl 30 instance. Earn your crap. I love it.)
- in addition, since content doesn't obsolete every time there's a new content patch or expac, as new content is added you just have more and more content to do - you can revisit existing content for a challenge or new content for a challenge - you're not perpetually limited to that one slice of the most recent content being challenging
- better competition and balance in PvP (ie, nobody will overwhelm you with gear - it's more about skill, teamwork, good factors). Some people love to grief. They wanna play on PvP servers that have zero point to the PvP and no reason to PvP except to make each other miserable. Or they wanna go into BGs decked out in the best gear to destroy undergeared people who have no chance. Well, GW2 may not be the game for that type of player.
- no closed door or exclusive content. In a typical gear progression type system that stats you gain chasing that carrot don't mean squat. They let you trivialize lesser content but most players aren't content bullies - they want challenges, they want that next tier. All the gear really does is enable you to do that next tier of content, which is a closed door to other players regardless of their ability. A player could be late to the party and miss out on progression such that few guilds run the content she needs to get up to speed, or they could just be in a guild that just never gets it done, and so on. The challenge for endgame content should not be in picking the correct guild to get thru content, it should be doing the content itself and your ability as a player.
Without the carrot anybody, any guild, any group can start tacking challenging content at any time without having to gear up or pass thru lots of obsolete content few other people are actively doing to catch up.
Some people enjoy being on top, or being the server first, or being that elite guild that clears content, blah blah. Oh well, if epeen is all you live for, maybe GW2 isn't for you and I think the vast majority the rest of people who play won't really be all that hurt over it.
- for PvP, gear rewards make even less sense. I've long considered PvP gear rewards to be just another way to reward solo players with another avenue of ez-mode loot. People who group hop in on the gravy train too, and some games have competitve e-sport but do you really need gear rewards if you're trying to be competitive? Should real competition be about skill, teamwork, and not be about gear advantages? If you win an e-sport event do you want a piece of gear that's trivialized bank fodder the next time a new tier of gear releases, or would you rather have something you can show off forever, like some unique vanity reward that nobody else has?
I think 5 man content can be MORE challenging than raiding for a variety of factors that are well documented. There is a certain elegance in getting things done in raid groups but a lot of it is being organized and getting the larger group of people to not do something stupid moreso than all members of a raid team performing at a peak level. Wooden Potatoes has a great video on youtube called "WTF no raiding?" that discusses this in a fairly sensible way and I'm sure it's been debated to death.
Achievement systems in video games, especially in MMORPGs, show that peole are perfectly willing to pound content, even trivial, silly, and utterly meaningless content in some cases, just to say they've done something and usually for no loot type of reward. Prestige can be reward enough.
Plus...and this is big....
What's the first thing people talk about when a new pvp season or new tier of gear is released (any game with endgame carrot, not just WoW, of course)? Man, that stuff looks like crap, is dope, sucks compared to XXX, blah blah. They don't talk about the stats at all. Sometimes the set bonuses are mentioned. But the first thing is always what the stuff looks like. People care about appearances. Even when it comes to their endgame epics and new tiers of gear - the first consideration is, will I look cool wearing this stuff?
Most games these days give you ways to deal with appearances to some extent but if you have some kind of system that lets you show one armor set while you wear another, you still need the cool stuff to show.
So...if there's a level playing field with challenging content such that it requires significant effort to do content (or succeed in pvp), and the rewards you get are different sets of armor types that are your "bragging rights" but are cosmetic only, make you look cooler, and you have choices due to having multiple sets from various sources, all equally powerful so you're not locked into wearing 1 specific set to be the latest uber, I think it's a win...
...because people care how they look, and they care about achieving, and as long as there's a distinct way to show off and say "I've pvped enough to have a full set of pvp gear" or "I've cleared this particular hardmode and have the armor to prove it" then I don't think the lack of stats and the continual and ultimately meaningless stat upgrades via loot carrot are necessray.
I have to say, I'm so glad GW2 has gone this route because it's like a breath of fresh air. People are often asking, what could be different about endgame and I think this is a pretty good answer, or at least a radical shift from the typical that can be equally compelling and lasting.