If WoW has around 10m subscribers world wide (the last figure I remember seeing) and each of them pays �9 per month, that would mean that Blizzard pull in �90m per month.
Even if half of those subscribers left for SWTOR, D3 or anything else, they'd still be taking �45m per month. I'd guess they'd managed to scrape by on that.
If only 1m people buy the next expansion and it were to cost �20, I suppose Blizzard would take at least �10m after packaging, shipping, retailers, etc.
I'd expect a lot of the development costs of the expansion to be covered by the monthly subs as the teams are working on WoW anyway.
Blizzard don't come across as desperate to me.