WOW DYING?

No.

1.1M subs down last quarter does not equal WoW dying. Decline? yeah, sure, id agree to that. However, WoW still has more subs than any other MMO ever will have (Yes, i went there).
I expect Sub numbers to stabilize around 10-10.5M during early to mid MoP. After that, who knows?

MMO champion has a list of some reasons as to why we see this major decline (And some other intresting facts)

• 16.9 million Battle.net users logged in last month, up from 10 million just 3 months ago.
• 10 million D3 copies sold, with 1.2 million of those from the Annual Pass. It was the best-selling PC game for the first six months of 2012.
• Most of the WoW Subscription losses were from the East.
• Losses are from people playing Diablo 3 and leaving for other things to do until the new expansion.
• Mists of Pandaria will utilize TV and online ads leading up to the launch.
• The China launch Mists of Pandaria will launch as soon as possible, not likely in Q3.
• 4.7 million people watched the event at MLG for Heart of the Swarm.

While the Annual Pass was a huge success money-wise, i doubt many of those who signed for it will do that again. Personally i signed for it, D3 for free was quite neat. Expecting to see HoTS as the game we will get for free with the next annual pass.
If Blizzard wants to keep their sub numbers above 10M they have to release more content, three raid tiers over two years just wont cut it (As we saw in Cata) - 8 months of DS is rather lame.