It starts with excluding teen players. At 18+, and rightly so (heads really do roll) it excludes straight away an important customer group. You may think it gains a similar number who are relieved to not have to play with kiddies, but there is another aspect: People are not going to switch on their 18th birthday, as they already have dozens of good friends elsewhere whom they play with every week. This will hamper future recruitment. Also, not all people really like non-cartoon hyperviolence and photorealistic harlots even after the age of 18. Actually perhaps especially not after that age.
Then there is the hardware requirements. Where WoW will run on most desktops that are not in museums, and even non-business laptops, AoC requires either a brand new or painfully expensive computer. In the case of laptops, both of the above. Forget Linux or OSX. AoC will refuse to even install on some computers that can run WoW full tilt.
The game has sold amazingly well so far, 400 000 registered players in the first week. But we should bear in mind that the core player of this game is the "serious gamer" who pre-orders his games, not the impulse Wal-Mart shopper. I very much doubt it will keep growing at the same pace as World of Warcraft or Everquest. It will however probably have some loyalty among the gritty players, probably enough to carry Funcom through the next five years as well.