I have really fond memories of large-scale enemy-city raids.

An open world dungeon sounds pretty damn fun not gonna lie

"Open world dungeons" were shied away from by the devs of vanilla because those devs came from Everquest and saw what that kind of content did to that game. Same reason Blizzard eventually stopped really doing open world raid encounters outside of the rarest occasions.

Group PvE in the open world space is either too easily farmable, or the spawn timers or rewards from encounters make it not worth doing, and the area becomes a dead zone. If an open world PvE boss constantly respawns with good loot it will get farmed to death and everyone will have that good loot, making it no longer good, but standard.

If its a long CD on respawn then it will get camped and insta killed if its worthwhile, if its not everyone will ignore it.

Instanced Dungeons/raids are balanced around having to go through the entire thing from beginning to end (or via some designed shortcut,) this allows the power level of drops to be higher, especially if there are limits of runs pr hour/day/week, ensuring the gear is not instantly spread among the playerbase and remains "desireable."

WoW does do small regions of elite enemies, usually for questing purposes, but there is a good reason they don't do it all the time.

From TBC onwards the most common use of an "open world dungeon" were the islands usually added in latter patches of expansions, where they expected basically the entire player base to be there together, and those have suffered hard every time higher tier content have been released. Most people stop going, and they become impossible to complete except by those who massively out level or out gear them because no one is there to group up with, and no one wants to go there.

Open world dungeons work best for at level content everyone wants to do, but they become annoying obstructions to players the moment they aren't desirable to do.