I never understood why people cared about housing... it is a colossal waste of time for the developers. If you want to play barbie doll house, go play the sims.
It has nothing to do with a "barbie house". Here, let me show you my mog house:
See all that stuff? That's from the events every year. Up until the most recent years, I did every single event. Hell, back in the day I even wrote a walkthrough for the original Summerfest. To me, it's a place to display what you've won over your time with the game.
Eventually, you get the best gear, and that gear gets replaced. But your house stands in tribute of your time (mis)spent on the game. It is a collection of those things that mean something to you, that have value to you.
Plus then there's the idea of storing extra gear there, possibly mannequins will return so you can show off the armor sets you don't use but just cannot convert or sell because, hell, you worked hard for them... And it just makes the world more rich to literally have a place to call home in it.
Every other MMO I've played has had some version of this outside of WoW... and oddly enough I find myself least able to stand WoW. Because it never felt like home, like I ever left a mark there. This could be why.