Vanity items have no impact on gameplay?

No, what you mean is they have no impact on your gameplay. You however do not take into account that others may put much more stock into such things as collectables and vanity. Raid gear may be the top end of the gameplay to you, whereas vanity gear, socializing and/or collecting all the items in the game may be the top end of gameplay to someone else. Just because you don't see it as important to yourself doesn't mean it automatically has no impact on someones game.

I don't know why it is so hard for people to understand that people have different playstyles and wants for a game, and an MMO for a lot of people is a world they can socialize and have fun in rather than solely acquire 'better and better gear'. As an example, I dislike the gear treadmill, but I understand that other people might actually like it. You may not agree with them and they may use 'slippery slope' wrong, but to say they have no leg to stand on is silly.