Absolutely. It was fun and there was a certain charm, but it's also incredibly outdated. People put up with that at the time because it was good for the time.
Nowadays if you make a game and people can't queue for random groups on their own time? Yeah, good luck selling copies of that. It'll tank. It's just the evolution of games, sometimes too much convenience becomes the status quo, but that's just how it is.
I certainly don't think WoW could ever go back to the no-LFG-tool days, but I don't think its correct to say that a game without a queue system would fail. I think if there are enough compelling features and an enjoyable community, people like taking their time in a world and just journeying to get to their destination. Part of the problem with WoW and it's "lack of content" is really just the speed with which queues and ports to the dungeon allow you to burn through the world. There is actually plenty to do, but if you can knock out 10 dungeons in a night, then it's not going to last very long.
People become more addicted when they can accomplish slightly less and have things to look forward to.