In the time before time
In the original release of World of Warcraft, there were a variety of dungeons catering to characters as they leveled up. Once you reached level 60, the highest level you could reach, there were more dungeons you could run that were designed for the mid-50s to level 60, and there was one raid. There were also large dungeons that you could run in a raid group (Blackrock Spire's upper and lower branches, Stratholme, even Scholomance and BRD at the time of release), if you wished to and could assemble a group. This changed over time, but even today, you can bring a 10-man group to Blackrock Spire if you wish.
The rewards didn't improve, however. The gear in 5-man dungeons (with the exception of a few very rare epic drops like Treant's Bane, the Runeblade of Baron Rivendare or the Blackblade of Shahram) was always the same gear. There were no heroic 5-mans. If you were not running 20- or 40-man raids at that time, the best gear you could hope to acquire by the time Naxxramas launched would be the quest-derived epic dungeon set pieces, some crafted epics, and if you had the fortitude, some PvP gear that at the time had no resilience on it, since the stat didn't exist yet.
Basically, if you weren't raiding, there was a point at which you couldn't possibly improve your gear. And if you were raiding, you weren't interested in 5-mans at all. Past a certain point, there was no reason to go to them. With spending hours clearing trash for rep or possible epics or elementium ore or what have you, you didn't really have the time or inclination to do much else. Simply put, the people with the gear to zerg classic instances didn't often bother; there was no incentive for them to run those dungeons unless a friend needed to get something. If a new guildmate needed an Onyxia key, then you'd see several geared raiders go to BRD and rip the place to shreds.
Dungeon fires burning
The Burning Crusade started to see a shift in the way 5-mans were approached. First came the debut of the heroic dungeon, which meant that all of the new dungeons introduced for leveling purposes would also serve double duty for level 70 players, giving them more options even if they didn't raid. Second, heroic dungeons provided a drop per instance that was about as good as the starter level epics from raiding. In addition to the changes to raiding itself (Karazhan as a 10-man dungeon making a raid of 10 people viable and itemized), this meant that 5-mans were viable longer and gave better rewards.
By itself, however, this innovation didn't lead to 5-mans being zerged, because it was still fairly difficult to assemble a pickup group of five people. There were issues with tanking classes, issues with DPS classes, and often, groups were assembled by players deliberately tweaking the runs so that they would be the only one who could make use of X drop.
Another innovation of the BC-era dungeon was the Badge of Justice. Originally dropping in heroic dungeons and serving as currency for items to help one run the first tier of BC raiding, the badges eventually began dropping in all raids and were useful for purchasing higher-tier epics equivalent to later-tier raids. However, since they still dropped in 5-man heroic dungeons, it became possible for someone running those dungeons to gain epic gear of a much higher item level; as a result, 5-man heroics were worth running even for players in 25-man raid gear, in order to stockpile them for when the next tier of raiding debuted.
When the Fury of the Sunwell patch dropped, many players flooded the Isle of Quel'Danas quest hub to force it to open its badge vendor as quickly as they could on their realms, entirely to purchase the epic items, which were roughly equivalent to the drops available from the Black Temple and Mount Hyjal raid instances.
This definitely increased the level of highly geared players zerging down instances, because there was an incentive to do so. Five-mans by the end of the BC era were an effective way to gear up a character in gear good enough to zerg 5-mans. By near the end of the process, a group so equipped had relative power that no group running 5-man content in original WoW could ever have boasted. The only instance that could serve to challenge these groups was Magister's Terrace, released with Fury of the Sunwell; it dropped gear on normal mode as good as a heroic dungeon, and on heroic, equivalent to the first tier of raiding from every boss.
The Wrath of the dungeon
Almost all the elements of the BC model were present (if in some cases modified) in Wrath. The model changed further by dividing the kinds of emblems one could get into heroism (for heroic dungeons and 10-man raiding) and valor (25-man raiding). As each new tier of raiding dropped, new emblems for that tier dropped; eventually, the lowest tier of available emblems would graduate so that 5-man heroics would give conquest, then triumph emblems, making higher level gear available from vendors.
The combination of making raiding (and thus raiding gear) more accessible, and then making it available to players who never raided via emblem vendors, helped make running 5-mans continually profitable even for raid-geared players. Also attractive for highly geared players were the heirlooms that could be purchased with said emblems.
So we had a system that rewarded raiders for running heroics while also allowing players who never raided to get gear at least comparable to those who did. In each case, said gear was far and away more powerful than that which actually dropped in the heroics (just like the BC model), even with the introduction of new, higher-itemized and more highly tuned dungeons (again, like the late BC model of Magister's Terrace). What really set things in motion for farming heroics, however, was the introduction of the LFD tool.
The LFD tool made grouping easier -- so much easier, in fact, that while players are still capable of putting together a 5-man group and going to the dungeon itself, with the LFD, you could easily be a guildless player who knew almost no one else and still run 5-man heroic content in an MMO with other players.
The LFD tool provided the final piece of the puzzle for heroic dungeon farming to reach its current foment: itemization and rewards available for people of varying gear levels, ease of use, constantly scaling heroics to provide higher and higher rewards outside of emblems, as well as emblems scaling with each tier of raiding, and a means to enable almost anyone to run two or three dungeons in a two-hour period.
Now, while Cataclysm's dungeons and heroics will be harder for a while and are set up with the new justice/valor points system, eventually players will outgear the heroics the expansion launches with. Eventually, new ones with better gear will be released, and eventually, players will outgear those as well. This is not bad. This is, in fact, an accessible and working model. This makes 5-mans viable and rewarding content.
The trick, which I believe Blizzard has shown every sign of working toward, is keeping those dungeons viable and challenging for longer by throttling how quickly gear can escalate. Can the justice points/valor point system allow for rewarding both raiders and 5-man players in an equitable way with its inherent cap system while still motivating players to run 5-mans? Will gear inflation (the result of heroic raid bosses in Wrath) be curbed? We have yet to see, but it looks hopeful so far.
World of Warcraft: Cataclysm will destroy Azeroth as we know it; nothing will be the same! In WoW Insider's Guide to Cataclysm, you can find out everything you need to know about WoW's third expansion (available Dec. 7, 2010), from brand new races to revamped quests and zones. Visit our Cataclysm news category for the most recent posts having to do with the Cataclysm expansion.