Back before Wintergrasp was first introduced, Blizzard told us that they'd finally figured out world PvP. They said to us that they'd figured out how to have hundreds of players fighting in an open zone at a time, without any major slowdown or lag issues. At the time, we were skeptical (and this was even before the instance lag after the WotLK release), and we continue to be: anyone who ducks inside Wintergrasp while things are nuts can tell you that they're far from perfect.
But maybe not for the reason you think. Beatus on Kul Tiras posted a pretty well-written complaint about the layout of Wintergrasp on the EU forums, and new blue poster Ancilorn speaks up with a little insight into just how Blizzard was planning to keep down the lag in WG. They were planning to spread players around to the towers in the southern side of the zone, thus allowing hundreds of players to play, but in a few separate groups conquering different objectives.
The only problem, says Ancilorn, is that there's not enough incentive to split players up -- people who go south miss out on honor and daily quests, and there's not enough reward to make them go that far. He says a retuning of the map will eventually be done to try and spread out the battle a little more.