Because GW isn't strictly an MMO as the developers and the MMOGChart (indusrtry standard due to popularity) does not list it as such, and is basically a special category earning model where it incurs 80% less cost than a traditional MMO.
1. There are no GMs. So if you bugged out or got stuck or got problems with another player like stealing loot, kill steal etc, no GM is going in to help you 5min after you get the problem. GMs are also one of the more heavily incurring costs for MMOs, they charge by the hour and you have a couple of hundred of them (or even thousand) for larger games.
2. Even GW creators have said they do not make the large patches or changes the same level as WoW (Cataclysm, WoTLK, etc) because it can cost a million dollars or more to release those kinds of patches. They release it in smaller patches which costs less so it can be downloaded on the fly. Of course the problem with this is that it cannot create too large a change in the world, like how WoW turned several maps from a green forest to a barren wasteland because of Cataclysm storyline on one go. Its incremental.
3. On GW, some quests are "instantiazed" (their term) for only a small group of players, meaning not everyone has access, so they track only a few players at a time for certain quests. less costs
So how do they make money? The books. They try to make a compelling enough story line that more people would buy the books. They apparently do. Other items for sale are the clothes like you said, and extra character slots among others.