They probably just don't want to. It would also be a very long and costly project, even for them. Instead, they tried to make a
new one (Titan) but canceled it, and Overwatch arose from the ashes. I do agree, currently WoW looks dated, but the type of visual fidelity upgrade we'd probably all imagine for it would essentially amount to just remaking the entire thing from scratch, I'd assume.
Personally, I'd rather see them concentrate on their new project(s). But maybe, just maybe one day in a few (many) years down the line they'll decide to come out with either a full remake, or a very extensive graphical overhaul of the existing version (which I highly doubt they'll ever do). The only thing I can imagine them doing is a 'light' upgrade version 2.0, one that follows the original upgrade that they've done a couple of years ago (when they increased polygon count on characters and whatnot). That type of upgrade... sure I guess. But an actual next generation WoW? That was pretty much their canceled game, Titan.
It might just be a coincidence (or you saw the video already, hence maybe that's why you created this thread), but there's the
first video out of three, over at GameSpot, that speaks of Blizzard's (mis)adventure with Titan and essentially why they came up with Overwatch. It also sheds some light about how the atmosphere was (internally) at Blizzard during that period (when they worked on Titan). It's a nice video, and they'll release two more soon.