The interesting thing about Blizzard's writing is that its shallowness occasionally provides solution to what would otherwise be a glaring discontinuity. This seems like one of those occasions.
The difficulty in describing Azeroth's technology level is that it is not at all standard. Between race, city, and even individuals, there are notable disparities in technological capability. While this seems impossible (why don't the humans in SW ever get what the gnomes are doing), it has actually been the standard for longer than it has not. In order to understand why this happens, one must consider the economic and governmental conditions of Azeroth and their differences from Europe of the last few centuries.
Two key differences stand out: governance, and economy. The responsibilities of the state for most of WoW's peoples are very loosely defined, somewhat resembling medieval Europe. The state is responsible to protect its land and holdings, but very little else. We understand that attempts are made by most cities to police the surrounding areas, particularly those providing food/other resources. There is, however, no evidence of any investment in education or development by any of the governments. This means no standardization of curriculum, and no research. If a particularly clever person invents a thing, they control all knowledge on how to make that thing and can only teach those who they choose. Maybe they write a book to pass the knowledge on, but there is no common method for distribution or even a frame of reference one can draw from standardized curriculum. Eventually, they die, their students fail to pass the knowledge they gained widely enough and all extant copies of their work are destroyed. This may sound far-fetched, but it's actually been the more common result of invention through most of western history (see, Archimedes, Library of Alexandria, Library of Constantinople, Sacking of Baghdad, and so on.)
As for economic differences, we see that regions are exploited for resources to provide an immediate push forward as part of a war movement, but there is no evidence of sustained development beyond immediate needs. Further, while the state appears to collect rents, it turns all of that revenue toward war and its vague responsibility towards protection. There is no evidence of state investment in research or continued development. Additionally, the lack of a robust banking system which can track both debits and credits, means the private citizen would have a very difficult time getting a loan. This makes the idea that innovation could be financed by private capital also very unlikely. People may point to the banks in every major city, but these are not banks in the way we understand them. They store money and goods, yes, but they provide no interest on money stored, or credit.
Thus, the issue with seeing all this amazing technology here and there, but not seeing any real industrial revolution in Azeroth can probably be blamed on poor governmental and economic conditions slowing the propagation of technology. Overall, Azeroth is correctly, imo, placed at a medieval European level of development. Fantastic technologies exist, but are poorly understood/unknown by/to the masses and depend on artisan manufacture.