They had this in 1.0, just open zones, however this led to a lot of problems. For one, the strain on PC's was insane as the graphical quality of the game and never-ending zones made it incredibly hard to generate zones fully. This meant the world was full of 'corridors' so that you couldn't fully see the world outside while it loaded (take a look at some old 1.0 maps on google and you'll see). You would end up walking from one zone to the other in a massive walled corridor (whether it be a cave or a tree'd path) in order to avoid the loading screens. In quite the opposite to what you would expect, it meant the zones had even MORE walls than right now.

Against what you say, the game would experience a lot of lag, the graphics would have to be toned down, and computers would struggle a lot more. The walls/zones are there to give the game a better flow.