A quarter of your guild leaves the game because of a patch/new game/mass banning/whatever. Now you do not have enough people for the top raids, so another quarter of your guild leaves to join other guilds. Now there are half as many people in your guild, so it does not seem worth logging on as much, which starts the downward spiral until there is maybe one other person on. Players: how many times have you quit because of a shrinking number of guildmates/friends?
Developers: why do you not have multiple guilds? This is not even innovation; A Tale in the Desert launched in 2003, and most of that game was two coders. Doing so could have solved the guild problems that Burning Crusade created through something like this, which is how all major projects are done in A Tale in the Desert.
One guild might leave all at once for a new game. If you are in seven guilds, and at least four are staying, you have far more reasons to stick around.