The Importance of Inventory Space
Inventory space is essentially spots where you can place items, without inventory space, you can not put, any items, therefore, not being able to own any items. So, from what I see, having more space is like having a greater ability to get 'stuff'. It is the 'stuff' that we all sell and use, and that moves any economy, and even the game itself. Therefore, more space, is more stuff, which means more capital.
I say capital, since even quest items, or vendor trash are all worth gold. Even quest items that are worth exp, and gold, and items, is all gold. Inventory space is essentially the size of your wallet. It is impossible to run a glyph making business with only four 10-slot bags. You need something in the line of over 100 slots just for your character. Without that much space, the business, and therefore your gold potential is reduced.
This is why bags and guild bank spaces are so expensive, compared to other goods. To get full guild bank slots, you need upwards of 11k gold. But, with 11k gold's worth of space, you can easily make your business expand, and gain more than your initial investment of 11k gold. The best investment of any business is inventory space, since inventory space really limits you to sell a type of item at only a certain rate.
Then, people would say, why buy a 'gigantique bag' for 1.2k gold, when you can buy frostweave ones for, say a maximum price of 100g each. The reason is simply because larger bags mean more space, and that extra 8-16 inventory spaces give you an advantage far greater than merely 4.8k, or even 12k.
This idea can be explained with a metaphor. Before WOTLK, the level cap was 70. You can be the best DPSer in TBC, but, still can not catch up to level 80, nowadays undergeared noobs. You just simply don't have the possibility of getting those levels needed to generate that kind of DPS, you need a higher level cap to dps better, with less effort, in terms of gearing and strategy, and timing. A level 80 hunter can make a macro that shoots off their three main shots, and just hold on to it, and make at least 2-3k dps, the best TBC raider couldn't even make around 3k damage with his long-farmed gear, and his skills. A level cap of 80 just opens a huge path that can not simply be reached with a level cap of 70. Now, replace level cap with inventory space, and DPS with cash/gold. You'll see what I mean.
Now some can say, that they only craft epics, and epics only require 1 inventory space for each. I say, that they are not making money to the fullest extend. First, the epics market is only for level 80s, which severely limits the customer base, and, there are almost no returning customers, so, it's one sale per person.
In the other hand, JC and Inscription are good professions, JC serves the level 70-80 range, and a single piece of gear can have up to 4 gem slots in it. This means that the average min-max player buys up to 20 gems or even more. Also, there are repeat customers, as there are 7 out of 10 classes that can do another job in an instance, so, people will be constantly changing gear, and, therefore regemming.
Inscription is important as they are the way Enchanters make easy money, and they create glyphs for all the characters from level 1-80. People change glyphs according to their spec all the time too.
These two professions of inscription and JC are both large-volume businesses in which you must produce large quantities of the goods to sell to many, for a somewhat lower price than selling epics.
I must ask, who is richer? a fancy restaurant downtown that charges 100 dollars for desert? or a MacDonalds across the street that serves cheeseburgers for a dollar each? The fancy restaurant is probably quite rich, but, the MacDonalds' richer, much richer.
It is better to have a lot of sales, directed at repeat customers, and to sell something that everyone can, and will buy. There is no one in the world that hadn't gone to a MacDonalds, whilst there billions of people that hadn't gone to a fancy restaurant.
That said, larger-production businesses are more profitable, but, there is a catch, what if your enlarge your business to serve over 10,000 people, but there is only 4,000 people in your server? The solution is simple. Rest for a while, and when the demand goes up, due to a lack of supply, just list at the AH!
Like the level cap metaphor, you can never provide enough for the 4,000 people if you only have two tabs of guild bank, or only frostweave bags. To cap it all, Inventory space is the limit to your goldmaking ability; extend your limit, and your gold will flow!
I hope I had enlightened yall about the importance of inventory space in WoW.