Complete lack of any AI for the monsters

[ZugzwangZeitgeist]

The players act nothing like the AI.

This is incorrect. Given the absence of a warrior and heavy aggro manipulation, monsters determine targets in much the same fashion as players.

"Hunt the squishie" is far more predominant in PvP than PvE. Players are much better at finding out who the most competent player in an enemy group is.

Of course players are better at such things. However, that doesn't invalidate the fact that the core monster AI used follows the same basic philosophy of attacking the greatest threat that most players will.

Players don't break 2v1 engagements because a second foe just glances in the general direction of the "add", unlike AI enemies (try it yourself, when you see a 2v1 in PvP throw a weak heal, or a crappy ranged attack at the foe that is not being beaten on by your ally and see how likely it is he'll come after you when a 2v1 has a much greater chance of success, then try it in PvE and you'll see how you can pull adds off an ally by just looking at them if your ally hasn't been "building aggro").

Monsters do not coordinate attacks, no. Their behavior is selfish rather then group oriented.

Players can't be "pulled" by shooting at them and then running into a group of allies waiting to beat the snot out of them.

Yes they can. I've even seen monsters do it to particularly dim players :)

Players seek these numerical advantages constantly and logically. Players realize they're in a losing fight and try to retreat waaaaay earlier than the AI. Players know how to use mobility to their advantage. Players lure enemies into traps, not just stand there pressing "attack".

Some do.

Players can interfere with "glass cannons" and healers without having to all switch targets and decide to stop a fight and start a different one (using crowd control skills on those pesky enemies while killing someone else) and can do this even before these enemies have used any ability that makes them climb an imaginary "hit list".

Actually, so can most monsters with abilities of that nature.

And if you want to see an even different player behaviour, battlegrounds have them thanks to the simple fact that there are rules to win encounters different than just merely beating each other until the resurrection timer is longer than the time you stay alive.
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You appear to have reduced your argument from "There is a complete lack of AI for the monsters" to "Players are smarter then monsters." I do not disagree - players, at least some of them, behave more intelligently then monsters. My contention is simply that the AI used by the monsters, particularly high level monsters with wide arrays of abilities, is quite strong for the genre, a statement which none of this refutes.

From my perspective, monsters NEED to be dumber then players. Monsters with exploitable weaknesses gives players something to actually do. If monsters had no ability to be "managed" by players, and simply used the best tactics for any given situation, then the only way players could overcome a situation would be brute force and never having an exploitable weakness. Taking this even further, dungeons would be unassailable - afterall, all the first orc in Lower Blackrock Spire would have to do is sound the alarm to his neighbours and you would have to fight a hundred or more orcs.

The atmosphere and feel of the game relies on monsters who are, at their core, passive and dumb. It is the players who are the instigators, sneaking through the dungeon and slowly killing it's inhabitants.

While a game which featured highly aware monsters would certainly be interesting, it would also require a total re-thinking of the genre. Dungeon crawling would be closer to Splinter Cell, with players desperately avoiding combat. It would be like if the game were filled with nothing but variations on the rogue class. Or even worse, combat in the game would be nothing but number crunching and optimizing, with the side with the biggest numbers winning. It could be a fun game, for sure, but it would not be a Heroic Fantasy MMORPG.

World of Warcraft, in general, does a good job at compelling and fun Heroic Fantasy style combat, particularly for an MMORPG. I don't think it's really fair or reasonable to fault it for failing to be what it was always advertised as. Since I read this thread I've been trying to think of an RPG with a significantly more sophisticated AI then the model presented in WoW - I've come up with a lot that are even dumber (from Rogue to Fallout to Baldur's Gate), but can think of none that were much more sophisticated.

It's also worth mentioning that there is a difference between adequate Artificial Intelligence for monsters and having the monsters behave in the smartest way possible.