Considering Blizzcon is basically a huge advertising fest (primarily) paid for by attendees between admission and merchandise…cancelling it can’t be viewed as anything but a bad thing. There are really only 2 explanations for it.
Either WoW is losing more subscribers than even expected, which is understandable because these things tend to accelerate and snowball. With MMOs as players leave, it negatively impacts all aspects of the game (socaializing/raiding/pvp/auction house, etc) and it snowballs which leads to more players leaving. The death of an MMO is usually not a slow curve, it ends up being a sharp dropoff.
The other option is that Blizzard really doesn’t feel like they will have enough new content to announce to support Blizzcon this year. If they are counting on Diablo 3 (which doesn’t sound great – a 2D game that looks straight out of 2002), the SC2 expansion (meh), and MoP which left everyone pretty unexcited – that’s a little disappointing. I was really hoping for at least some snippets of the “Titan” project or the expansion to follow MoP at this year’s Blizzcon. Saying developers can’t afford to take a few days (maybe a week including prep time) for Blizzcon is hard to buy.
I absolutely hate to say it, but lately most of the games I’ve been playing are EA: BF3, SWOTR, and Madden for me… and this coming from a guy with over 10 level 80/85 characters who was a hardcore WoW raider since 2005. Blizz needs to hit the reset button back ~5 years.