Comparing World of Warcraft to Second Life is like comparing Monopoly (the board game) to Lego blocks. The former has definite, artificial rules and objectives, the latter is an open-ended kit. To put it another way, the former is like living in someone else's imagination, the latter encourages you to use your own imagination. Or:

WoW = paint by numbers

SL = paints and a blank canvas

It seems clear why WoW has more users: most people believe they have no creative ability (sadly).

Or people understand how fleeting digital creations in someone else's sandbox are. Or people just create in the real world and are looking for something else.

As a software developer I wouldn't play SL because I create all day. I don't want to play a game that requires the creativity I am out of for the day. Sometimes it's fine to paint by numbers.

Your first point is right on. In the early days, Linden Lab's executives always said that SL would eventually be 100% open source, client and server, like the Web (and Linden Lab would just be one of the hosting providers). But they never open-sourced the server code, so people who thought SL would become "something like the Web" (i.e. not controlled by any one company) became disillusioned. I'd definitely put myself in that camp.

Your second point explains you, but not why the population at large (most of which is not doing anything creative at work) prefers to paint by numbers when not at work.