Uninstanced housing was ALMOST the worst short-sighted decision this MMO has ever made...
Carrying a copy of your entire inventory around as an active object though - is an even worse one... (read every response to why we can't have more inventory - if you understand what they say, from a tech point of view, you will be shaking your head and wondering just how a dev managed to not realize that would be a problem. Then again, I work in tech; and I'd say every company has something like this buried in it's code. Many companies have a lot more of them than SE does... devs who join later always find these things and just wonder WTF somebody was smoking... but also realize fixing them would require some major architecture revisions...)
Some people actually leave games when server mergers happen because it is such a well known 'sign of the apocalypse.' Back when WoW was bleeding players, it did some mergers, and I'd wager that only served to hasten the flight and inspire a lot of people to go look for a 'WoW killer'.
