Muckbeast over at Brighthub has a theory that quest based advancement is bad, because it is the new grind. While I'm not saying that quests couldn't be better, I don't agree. There are a lot of advantages to quests that Muckbeast didn't see.
One major thing Muckbeast completely misses is the type of quest more and more used in Wrath of the Lich King, but already present in some corners of The Burning Crusade: Quests with vehicles or other unusual game mechanics. In TBC that was just bombing runs, but in WotLK there are giants to ride, abominations to explode, sea cows to mate, dragons to harpoon, landmines to lay, and a hundred other things that wouldn't be possible without quests.
Another big quest-related feature of Wrath of the Lich King is phasing, the technology in which you finally get to change the world. Okay, you only change it for yourself, but that was necessary to not have the first player to reach that content spoil it for everyone else. Without quests this phasing change of the world would be much harder, if not impossible to realize.
Muckbeast claims that quest makes people anti-social, because they are never on the same quest and so can't play together. Unfortunately people are anti-social even without quests. In games like Everquest or Final Fantasy XI they work together because they have to, not because there are fewer quests. If you would remove all the quests from WoW, people would still be solo grinding mobs, not start to form groups, because WoW has a screwed up group xp system. If Blizzard would make gaining xp in a group much faster than solo, people would form groups and overcome the obstacle of different quests. There is also the nice solution Warhammer Online introduced: Repeatable public quests, which would have been a smash hit if Mythic hadn't shot them in the foot by making scenarios much more rewarding. By giving out quests to people for going somewhere, not by clicking on an NPC, you can make sure that everyone around you has the same quest, and can group if the incentives are there. WAR also has quest items drop for everyone in the group, negating another disadvantage of quests Muckbeast cites.
Of course Muckbeast is right that 3,000 quests of kill 10 foozles doesn't constitute engaging story-telling. But eliminating quests, or quest-based advancement would do more harm than good. You can't judge the merits of a system based on just one of its implementations. When we look around we see a lot of different quest features in different games which could be combined to a system much better than WoW's, but still having advancement mainly based on quests. Final Fantasy XI has cut scenes with your player character built in. Age of Conan has a great destiny quest series up to level 20 (and WoW has something similar for starting death knights). Quests *can* be great vehicles for story-telling.
One thing that WoW could do for the next expansion is to have a lot less quests, but have these quests take more time to complete, and give correspondingly better rewards. Instead of doing 10 quests for 10k xp each, players would do one quest for 100k xp, but that one quest would not just be killing 10 times more of the same mob. By having fewer and longer quests, each quest could be more engaging, tell a better story, and have a better chance to find somebody else with the same quest. It's all in the fine-tuning of parameters in the implementation. A game without quests, where people log on next to a mob camp and kill them over and over and over until they level, because there is no reason to move, is a lot worse. Believe me, I've been there and done that. Quests, while perfectible, are still the better alternative.