Many people credit daily quests with making earning gold in WoW easier, and that part of the reason Blizzard added so many of them was to combat gold farmers by making lots of gold available to everyone. I’m not sure if anyone has really broken this down before, but I believe daily quests actually make earning gold harder for most players.
Before TBC and daily quests, there were a few tried and true methods to really ‘grind’ gold. You either did gathering circles in certain zones, or you farmed particular mobs that dropped items of high value, usually something related to crafting. Pre-BC, crafting was the main ingredient that kept the economy in WoW moving, as supply/demand was highest in that area. Epic gear and other non-crafting item prices remained relatively steady, as the supply/demand of those items did not change.
Another pre-BC factor overlooked is the amount of people who actually went out and farmed gold, and the frequency of that farming. Raiders did it to pay for repair costs, which were somewhat high before the nerf, and also for consumables. Crafters would farm to support maxing out a skill, or to craft the one or two useful items they needed to make. Everyone else would farm whenever they needed money for new enchants, or perhaps some upgrade in the form of a BoE epic. An epic riding mount, while not easy to get, was not priced as high as the current 5k cost for an epic flying mount. And since we are talking pre-BC, you did not have the added cost of gems for gear.
The real problem with daily quests is that the hardcore players are able to grind them out at a must faster rate than the casual player, and a casual must dedicate greater amounts of time to the gold grind in order to keep up. This all reflects on AH prices, as anything of real value is priced ridiculously high. Now instead of taking 1-2 days from your normal activities to grind out some gold, a casual play has to dedicate far more time in order to achieve the same result pre-BC.
Dailies also encourage gold grinding from the entire player base, popping up each day with the lure of the blue !, and if everyone is grinding, it just raised the price bar that much higher. While before grinding gold was something you MIGHT do, grinding dailies is something everyone does when they hit 70.
My theory is that dailies and the massive inflation on prices might actually be a positive boost to the RMT industry. If I’m a casual player with disposable income, why spend time grinding dailies for days when instead I can buy gold, especially now that gold is MUCH cheaper thanks to all the methods Blizzard added. Sure that 5k epic flyer might seem expensive at first, but if we are comparing that price to all the top tier enchants and gems needed by hardcore players, a casual actually gets a bargain if they go the RMT route now than they would have pre-BC.
Of course dailies serve as yet another time sink for Blizzard to keep its players interested, but is a daily grind for inflated items really a step forward in end-game design? Is it really better to repeat the same set of ‘quests’ each day instead of going into an instance with 4 others, or a raid with 10-25? Has the end-game in WoW actually improved with the addition of daily quests?
Hardcore Casual 
I’ll answer your final question first – no, daily quests have not improved the end-game of WoW. They’re just an easy time sink to keep players playing. They didn’t raise the cap of daily quests to 25 as some generous boon to the playerbase, they did it so you can sink even more time into doing daily quests.
As far as inflation goes, I haven’t really seen it. On my server at least, prices on most things have gradually decreased over time as end-game goods become more and more available. The daily quests have greatly increased the availability of gold, but strangely has not led to much inflation. I think it’s due to the static nature of a lot of goods coupled with the high availability of gold. Once you buy that epic recipe, you never need it again. With gold widely available, more and more people have bought the recipes, and while there is an essentially infinite supply, there is not an infinite demand. Most epic recipes on my server cost less this year than they did last year, despite being vastly more obtainable for most people. The same is true for BoE epics.
Certain key consumables like gems have inflated as demand outstrips supply, but other consumables (such as primals) have consistently fallen in price, likely due to farmers flooding the market with them. With the increased cap on dailies maybe inflation will become an issue, but only time will tell.
Inflation is given. More people are turning to gold for dailys over farming. Dailys CREATE gold rather than simply redistribute it. The old Auction House mechanic worked because it simply redistributed gold and took a 5% cut as a gold sink out of every sale. After 10 transactions, an initial 100g of supply is diminished to 60g by virtue of the Auction House cut alone. Dailys, on the other hand, introduce new gold to the economy without a new sink mechanic to counterbalance the issue.
To make matters worse, since more people are favoring dailys over gathering, we are seeing less supply of crafting materials. It remains to be seen if other changes (like the badge vendors and reputation rewards) are resulting in less demand, but I can say definitively that the things I monitor have increased in price.
However, I think the net effect of inflation actually makes it easier for players to acquire things like the Epic Flyer. For example, anyone taking a gathering profession will presumably benefit from the rising prices relative to the static price of the Epic riding skill.
If anything, I think the dailys are more of an indictment that Blizzard is moving more towards the “badge vendor” model where purchases are made with things that can’t be transferred between characters. The hottest currency in WoW right now are Badges of Justice and those can’t be purchased. I think that will continue to be the trend.
Blizzard seems to be struggling to come up with a set of end game mechanics that are really compelling for casual players. Not that it’s easy, the great majority of MMOs fall flat on their face right about the time you hit the cap.
I personally didn’t feel that dailies made the game any better for me. Most of the daily quests start to really suck the third or fourth time you do them. If you log on an knock out the 6-10 most productive dailies every evening, you are looking at doing the same quests dozens of times to get up 5000 gold. Plus whatever horrific rep grind you decided to embark of if you don’t want just a generic flyer. I think that between dailies and farming I made it up to 2000 gold or so before I realized I was having no fun whatsoever, hadn’t been for weeks, and that it was time to quit.
Inflation works differently for different items. Gathered items have actually started to reduce in price, on my server, as the gatherers start doing ‘Gaining The Advantage’, and flood the market. They’ll continue to reduce, as the majority of crafted gear are only upgrades up to a certain point, and eventually everyone’s got two weeks worth of pots & elixirs sitting in the bank. The prices that are going up are the raid-dropped crafting items and harder-to-farm items like Primal Air. Hearts of Darkness and Hyjal gems are shooting up, as people who couldn’t afford them before have now bought out the available supply. More of an issue than the increased number of dailies, itself, though, is the introduction of a good number of quick and easy ones. I know a few people in guild that are now doing 8-10 dailies on several characters a day.
The other issue is that many players, self included, will cut back on their dailies either once they’ve hit exalted SSO, or once the armory is unlocked and can get their badge items.
I don’t think it has ‘improved’ so much as its become more ‘sustainable/tolerable’
Price gouging is one of my Biggest complaints about the WOW/BC online gaming.
We play this game to get away from the reality of the real life world and those who have brought it into the game just makes it harder to actually Enjoy the adventure of particapating in questing and escaping the real world hassels.
Come on, we may all want to be Rich in real life, but online, we just want to buy what we need to escape the Real World of working ourself to Death.