Reasons why they won't change it;
1. Change to the mpq fileformat and not encrypt it would be a waste of money since it would leave and give blizzard nothing. Or well.. Blizzard would waste a great bunch of money.
2. Encrypting the MPQ files will only make the loading process take longer, when (yes when) the format is cracked the only one loosing will be blizzard and the players who don't alter their mpq files.
3. You will at any time be able to load the models ingame via injecting code into the load functions in wow.exe from a "passive" dll like you can today, again encryption of the mpq file will then only slow the process of loading the file while applying the model change would still take those around +/-0,007 sec.
4. Machinima Makers, Web Authors and other connected to the community use applications such as WoWMapview and Modelview to get clean shots with the gamecontent they need. Blizzard knows that and started out with a offensive possition against these tools, while today they widely accept them and know that they got great promotional value for both Blizzard and the World Of Warcraft franchise. Encrypting the MPQ format would kill these tools.
5. Blizzard got the ultimately last word with having control of the EXE file and being able to update it without users confirmation.