I was the team lead for vanilla WoW (@grummz on twitter to see that its really me). People have been asking for my thoughts on the Nostalrius servers.
After giving it a lot of thought, I feel Blizzard could have found a way to support these significant fan efforts to bring back vanilla servers, rather than resorting to scary legal tactics. Blizzard, these gamers are not your enemy, they are some of your greatest supporters. Hire them, but them out. Almost 900,000 players say they want to see this. Don't ignore them. Don't tell them "You think you do, but you don't" and instead tell them "we love you guys and we want to thank you for your fandom." My suggestions:
1) You say you lost the original source for vanilla, so use Nostralus' version.
2) Hire the team that did it and let them run/support the service under the Blizzard banner.
3) Add cloud based support so people can spin up private legacy servers on Bnet, chose an expansion, and play with their friends.
4) Profit. :)
Mike, I helped build this game for you, I hope you'll hear me out. Support these fans and dedicated gamers.