A better comparison (especially for Blizzard fans) might be Diablo, where almost anything can drop almost anywhere. The problem with a random loot system like this, however, is exactly what I ran into in Titan Quest (a pretty darn good Diablo clone): halfway through the game, a great item will randomly drop, and you'll get a thrill from getting a sweet weapon. However, because you randomly hit it big, you'll have the problem of nothing better ever dropping again, and the game is pretty much over. Diablo fixed this by having separate areas to go through (and I believe TQ got patched in the expansion to fix this a little bit). But in WoW, you don't have that problem-- every new instance you go into will have better gear than the one before it, guaranteed. You can look it up on WoW Wiki, or look at the loot lists, and know exactly what's there.
In fact, some say WoW's loot tables are too random-- I always see Paladin loot drop whenever there's no Paladin in the group. But it does take a little bit of fun out of the game world when everyone is huddled around the Curator saying "cmon staff, cmon staff, cmon staff!" Giving us a boss or two where the loot is totally and completely random (out of almost any item in the game) could actually be fun.