Gameplay reasons obviously. Why would developers put Vulpera in Silvermoon where anywhere outside RP realms this city is a complete ghost town? You have to place new race where the playerbase does reside.
As for Blood Elven culture I agree they take a chunk of Middle-Eastern references. But I do fail to see Islamic touch there and more ancient Persian one with heavy lean to the Hanging Gardens of Babylon, Mesopotamia. Times way before Islam came to those lands.
Blood Elves give strong Aladdin-esque vibe. Blood Elf females wear very beautiful, very vibrant and very sensual outfits. If it was Islamic influences there, Elven women of Quel’thalas would wear way less impressive garderobe.
As for color palette that dominates Quel’thalas.
Red color is rather new addition that fully replaced blue. It represents their new name they took in honor of their fallen brethren due to massive tragedy that fell upon them.
It was a sort of turning point for them which concluded in few years of more strict government and usage of reckless techniques in the name of survival. It too had some influence on their current upbringing.
What I find quite amusing is the appearance of the elves with much darker skin tone. I like to belive this is a sort of Sunwell influence that takes hold of them. Those who work much closer to it get a fine tan to the point where their skin is almost pitch black. But as they move away from it, they slowly get more pale.
Too bad that Void Elves have this skin tone aswell. It would be quite the feature showing further distance that both races slowly making from one another, as Ren’dorei are deprived of Sunwell’s blessed touch.