I think they were needed at one point. Ours is a very quiet realm now, but I still remember the times when we sometimes had to queue to get in-game. And ours has never been one of the busier realms. Just that with the changes in their technology, I believe they can now fit more people on one realm than they could originally, meaning that now you’re right, there’s no need to have this many realms.
You have to also bear in mind, of course, that Blizzard are really the only ones who have the actual activity and subscription figures for the various realms, and they have to take into account that at the start of a new patch and even more so at the start of a new expansion, numbers peak - they have to ensure that they have enough capacity to take that into account, whilst still trying to balance the troughs when a lot of people stop playing. Although honestly, their “trough management” is rather lacking.
I have been talking to various people on various different realms … quiet and busy … and really the only real reasons there are issues with quiet realms are (a) mythic raiding/raid recruitment as a whole and (b) the auction house.
Luckily our guild does not do mythic raiding - if we did, we’d have probably gone the same way as virtually every other mythic raiding guild on our realm (ie, stopped raiding at best, died at worst).
Auction house is a major problem because, if we can’t get it in guild, sometimes some items simply aren’t available. For example certain legendary base items. One of the guys fairly recently wanted a legendary cloak … luckily I could make one, but we had to buy every single item of cloth available on the auction house, use all the cloth we’d got in the guild vault, AND scrape some more together in-guild, just to get enough for him to get it made. I bet that doesn’t ever happen on Draenor.
I’ve been keeping an eye on the community council, and someone there suggested a possible solution to that was to combine auction houses across realms, so there was less issue with being on a quiet realm. I don’t know how feasible that would be - but if they refuse to connect realms, that could be an alternative. Albeit a bit of a stop-gap one.