1) Costs were not zero for the re-release. The only version of the game data (stats, items, enemy spawns etc.) was in the form of an original database backup (from an old employee's personal stash!). Classic runs on the modern WOW engine, so work was required to shoehorn the old data in and reimplement systems and interfaces which don't exist in the current WOW engine.
2) Before Classic's release, by far the most vocal crowd making demands of Blizzard were shouting their slogan "NO CHANGES". I really don't find it surprising that Blizzard has not made major changes since the majority of the player base requested as such...
In terms of audience demographics, I've experienced nostalgia, but frankly I think the president had a point when he made his infamous comment. But I haven't seen any data to support any claims, beyond the existence of private servers.
The company invested significant development into Classic. The project started as a fork of Legion, in order to benefit from a decade of anti-bot measures, compatibility fixes, and Battle.net integration (auth and chat). They then ported the original game forward and added "layering" to avoid crashes that plagued the original game in 2004 and 2005.
I'm not sure what you're getting at, in my experience a massive chunk of the players don't play 'retail'. So the cost is just that, $15 a month.
Beyond that, do you have a source? It's not clear that any of these things they've been developing had significant costs in replicating for Classic.
It's a garbage money grab.
The idea that there is a huge nostalgia fueled demand for the original experience doesn't absolve a multi-billion dollar developer from a complete lack of support or quality of life improvements to the game.
There is just too much overlap with the fact that they can literally re-release a game with practically zero development costs.