"Blizzard Entertainment cannot speak to any reports surrounding the Iranian government restricting games from its citizens," the company posted on the WoW forums. "What we can tell you is that United States trade restrictions and economic sanction laws prohibit Blizzard from doing business with residents of certain nations, including Iran."
The issue isn't a one-way street. Iran has also made moves to block online games for cultural reasons.
Blizzard is unable to provide "refunds, credits, transfers, or other service options to accounts" in Iran and will "happily lift these restrictions as soon as US law allows."