This is what Zarhym shared with the community on the US boards: http://us.battle.net/wow/en/forum/topic/3424796689?page=4#73
He discusses our plans for Mists of Pandaria’s Pet Battle System and our philosophy about adding features to the game.
"We do add features to the game often based on concepts players have expressed interest in. But in order to dedicate ourselves to making epic games, we also need to spend a lot of time and resources anticipating what gamers of all walks of life will find fun. That's how all of our games thus far have been created. While our design decisions for any game will always be met with mixed reactions, we couldn't be respected in our industry if our approach to game design is always reactive.
As was said multiple times by Game Director Tom Chilton at BlizzCon, we want more content systems and forms of progression in the game so our extremely diverse playerbase has a lot of choices over what to spend time doing for fun, accomplishment, socializing, a challenge, etc.
A lot of players are really going to love this feature. It's going to be an engaging mini-game that actually has quite a bit of depth and progression, just not in the traditional sense of increasing your character's power. That shouldn't always have to be a driving factor in our content. As the Old Guard players have said countless time before, Southshore and Tarren Mill world PvP battles didn't become popular because there was a tangible reward incentive. The majority of World of Warcraft systems and content, particularly at level 85, are currently directed at enhancing a character's power. While that won't fully change, we want to continue creating new avenues to make that happen as well, such as is the case with adding a third, more accessible raid tier with the Raid Finder, or adding PvE Scenarios to facilitate the quick formation of smaller groups to take on a series of event-driven quests.
But Pet Battles and Dungeon Challenges are very different. With one, you're actually getting a use out of the pets you've collected over the years, in order to progress them in a fun mini-game, unlock countless more pets, and just generally give your character a new depth of style and flavor. Similarly, Dungeon Challenges are difficult 5-player dungeons which really allow you to push your skills and PvE small group coordination to the limits. They'll scale, so the better you do, the better you're rewarded and ranked. That gives your character a new measurement of PvE progression prowess and bragging rights. Plus, you can earn exclusive set designs which are purely aesthetic — to be used with Transmogrification — which, again, give your character a new depth of style and flavor.
It's about giving people options in the game to play it how they want to. We have a lot of people playing, so with almost seven years of World of Warcraft on the market, we want to continue innovating features we believe people will enjoy experiencing in this game. And a hell of a lot of thought, discussion, debate, and iteration at Blizzard goes into this stuff :)
The way various development resources are expended on creating features for the game is extremely complicated and very unique to each project. That can't be explained in a way that will be fully understood by the community at all times, in all situations. While we understand your point is that no resources should be spent on pet battles, you're really not in a place to make a well-referenced argument about what features in development are taking time away from others you feel are more pertinent."