One of the things I find interesting when people talk about Warcraft's raid size is that you inevitably find people who say the 25- and/or old 40-man raids were epic. That the 10-mans just aren't epic at all.
25-man raids are simply not epic. They are not epic in story or scale. 25-man raids are much closer to being a classroom field trip than epic (and 40 man raids are more like a tour bus gone astray ;)).
Xenophon and the March of the Ten Thousand, the invasion of Normandy, the defense of Stalingrad are all epic in scale. Heroic Naxxramas or Alterac Valley aren't. They are just too small to be epic. They are just small mobs, not epic groups.
The 25-mans aren't epic in story, either. Traditionally epic stories focus on a hero or small band doing a great dead. Other than Jason and the Argonauts -- and honestly, how many of the Argonauts can you name besides Hercules? -- epic tales focus on ten or fewer people. The smaller raid size allows you, the player, to know your contribution matter more, that you were important instead of being just another spear-carrier in a 25-man raid. It gives you a chance to be a heroic member of an epic tale. The impact of defeating Arthas with 9 good friends is always going to be stronger, epic-wise, than beating Arthas with 24 casual acquaintances.