I think I have an answer to all this.
When a person dies in World of Warcraft most of the time it is in an excruciatingly painful manner. Either ripped to shreds by a dragon, cut in two by a rusty sword, slowly poisoned and stabbed hundreds of times, frozen in a block of ice, having your blood boil.
Yeah. Painful. I would think that most civilians, so that would be the Dwarves in TH and the people of Camp Taurajo, simply don't want to come back to life, because they believe (quite correctly) that if they were to return to the Material Plane they would have to go through the physical anguish of being slain. For a second time.
Now, on to the big NPCs, like Cairne. He's somebody who can take a beating and not give a whit. In fact, before he was canonically killed, he was probably being hunted down every few weeks by a band of Alliance raiders. And yet he would come back- so the physical pain wasn't a big deal for him. He knew that being a leader of a faction of the Horde would make him a target to the Alliance. But then how did he die permanently? Why did he not come back after Garrosh killed him?
This is where psychology comes into play. Now, I'm definitely not a psychologist (nor can I spell the word), but this makes sense to me. Anyways, Cairne is used to dying to the Alliance and in fact, might be able to regularly predict when it happens. Garrosh on the other hand is someone he has an alliance with and, because of a disagreement, one challenges the other to an honorable duel. Some terrible Tauren crone (pardon me for not being up on my Horde lore), Magtha, I think she's called, poisons Garrosh's weapons, so when he nicks Cairne, poison enters Cairnes bloodstream and he begins to die again. Cairne, while on his corpse run or what have you is thinking about the recent events. He's regularly killed, but he can deal with the physical pain. But his ally just killed him with poison in a fight where they agreed that they wouldn't have poisons. He doesn't agree entirely with where the Horde is going, but he doesn't really have a choice- he can't easily side with the Alliance. The world is going to hell, elemental rifts are opening everywhere. He's been leading his people through several different wars for years now, never ending the fight. And his son Baine has proven himself with his work in Theramore. And he doesn't know about Magtha's plans.
All of this adds up to one thing for him- he can retire. And since if he was alive he wouldn't be able to retire, he'll just comfortably spend the rest of his life on the Spirit Plane.
Finally, we get to the players. When you die, you as a hero are given the choice to get back up and throw your face at those Murlocs or throw your face at that pit of lava again- you like every other living denizen of Azeroth can make that choice. That Decline button is always there when you're getting a res after a wipe. Of course, to be able to continue playing the game you do have to make the choice to go back to the Material Plane and be alive again.
A couple other notes on this topic:
- Undead are those who were forced to return. They aren't the same person they were when they were fully alive, but part of them exists- just twisted and corrupted.
- This allows Blizzard to bring back characters from the dead. In three or four xpacs, Cairne could say "Enough is enough" and take that dreaded corpsewalk back to his body and be back in the game.
- It creates a really interesting opportunity for RP. You could have someone be mentally scarred forever and have it get worse each time they die. With over 3 or 4k deaths on my main, I consider how I would feel if I died that many times.