Q u o t e: But the old areas would no longer serve any purpose, so even though they're there, no one will do them and the endgame content would be restricted to whatever was released with the newest expansion. If they released the game with a bunch of content designed for people who are level 50 (and released a bunch of crazy gear -- for level 50s -- along with it), this content would be totally ignored because there's no reason to stick around at that level unless it's the cap; all of your stuff is about to become relative bunk.
EDIT: In chart form...
Game releases with level cap of 60, expansion increases level cap to 70.
Level 60 dungeons: A B C
Level 70 (endgame) dungeons: D E F
Game releases with level cap of 60, expansion adds some more dungeons.
Level 60 (endgame) dungeons: A B C D E F
None of your old stuff becomes redundant, at least not instantly. Maybe you need some gear to do F, because F is harder than E which is harder than A B C D, but there's no jagged jump that comes from implementing a new level cap (which is entirely necessary for the players that weren't around for the level 60 endgame).
There isn't necessarily a jagged jump that comes from implementing a new level cap, though. It's only a matter of Blizzard balancing the levelling/difficulty curve properly. If the first things you encounter in area E are significantly tougher than those in area D, then sure, but it could be much more gradual than that (and a 5 or 10 level expansion on the cap makes this relatively easy to achieve, as long as the new content is long and varied enough). The difficulty can still continue to ramp up slowly, while remaining a challenge, it's simply a matter of getting the numbers right.
The best thing about waking up is the tears. I drink them instead of coffee now.
