I still don't understand why that model was adopted in the MMO sector.
Finance and business scale.
In the 2000s, SOE, and Turbine, and Mythic, and all those MMO pioneers were relatively small, autonomous structures. Basically, they had a local presence, and international sales were what happened by chance. I know, I got my EQ box by mail from a friend who was in the US, and most expansion boxes were to be had in small computer games stores that had an import business. You just didn't find those MMOs in any mainstream stores in France.
It all started to change around 2002, as gaming became a much bigger industry. That's when SOE tried to offload its european business to Ubisoft because it didn't had resources to properly expand - or so they thought - in that market, and, well, taxes were starting to come in play (quite simply, Europe started asking US companies for the tax on "local sales of services"). It failed, because EQ was already saturated, and the only way they could justify their existence was migrating existing customers to the non-returnable blackhole that was Venril Sathir (I think?). Just a before, Mythic tried the same, offloading their european business to GOA which was big online gaming business at the time (well, sort of). Didn't work, for the same reason: players were already playing on the US DAOC servers, and didn't want to migrate.
Plus GOA wasn't that good at online business. But I digress.
When Vivendi-Universal Games wanted to launch World of Warcraft, they already knew that people were interested in playing games in their own language rather than english (you had a number of people that had completely stopped EQ, even for years, that were interested enough in EQ French or EQ German to resub), and they had a european subsidiary already in place (due to the fact that, well, the Vivendi part was originally french). That, plus the tax hell that is Euro-wide VAT for non-euros made the decision easy: a separate business unit for EU and US, and localized games.