Numbers don't mean a server is good. It's also poor form to fall back on the argument that "it's free, so you can't complain". Of course you can voice your opinion on the matter. The matter is that the devs thought the stat switch would increase the distance guilds were clearing endgame content, which would provide them time to hammer out the kinks for the next chunk of updates.
Problem lies with the fact the game is still piss easy even with lessened stats on gear, and the devs were thrown into the pot when they realized a large portion of players were already done with what they threw at them. With no content ready to go if this was the case, they are now realizing how bad of an idea it is to start a server with only the 1st tier open.
As of now, they are most likely scrambling to get things out that they didn't have planned to be done for a while. This is also another problem because it's going to be bug riddled, and boy oh boy, do private server players hate those bugs.
Reality of the server is that it was simply not ready for the progression rate of players. It's understandable to thin out content for a private server, since once you release naxx, you're done. Unless you want to continue into a BC overhaul, your server is not going to provide new content to draw in new people, well, that is if you don't switch into a funserver.