They charge what enough people are willing to pay in order to give them the profit margin they desire. It's not so simple as cutting price = more subscribers = more money, as more subscribers also makes for higher costs (more servers and support reps needed, etc.).
So just as a completely unfounded example, cutting the price by 30% might need to bring in 50% more players just to match the profit of the higher price. But even that's not highly likely to happen. The potential MMO userbase isn't a nice curve of people who might play if only it were a bit cheaper; it's largely a cut between those willing to pay at all, and those not. And I'd say it's fairly likely that the paying crowd is mostly tapped already.
Honestly I don't see why Blizzard can't just offer WoW for free. I mean their staff ought to be working as volunteers, they should have loads of free servers handed to them from companies because companies exist to lose money, and of course graphics should be amazing and updated every few years that the bar is raised for free, because it's really as simple as just changing a setting on your game to improve them, and so can be done for free by those volunteers.
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