As an MMO developer, this is woefully incorrect. Our conversion rates for expansions are usually only between 40-60% of active players, depending on the lifetime of the product.
In 8 years, across 3 MMOs, I have yet to see a circumstance where keeping existing content available was 'not cost effective'. It costs literally nothing to not touch content. But it does cost something to remove or change content. Someone has to go in and actually flip switches and unhook data. And then someone has to test it. There's really no reason to do it, at all, unless you are intentionally converting something to the new max level. And even then, more often than not, there's very few good reasons to remove the old version.
Any decent MMO developer is going to keep in mind existing players. Any changes we make to level-based skill-systems or itemization always should take into account that a decent chunk of your player base could still be on the previous versions/expansions of your product. Usually this means you end up overpowered, because we don't re-balance the content to reflect the power increases that such changes always ultimately entail. But you (almost) never remove access to old progression content and items, if only to leave a treadmill and ramp for your non-converting players into a potential future expansion purchase. Looking at just non-converting players, I have to assume that if you haven't converted over to the expansion content you have a reason for doing so. Removing your progression treadmill isn't going to get you to convert, it's going to piss you off and have you drop out of the game. But if I can keep you on that treadmill, there's a chance - and statistically a good one - that eventually you will convert to the expansion, or a future expansion. I want you to keep playing, because as long as you are playing, there's the option for you to purchase into DLC and expansions. Removing your incentive to play at your current buy-in does not, as far as metric data suggests, get you to increase your buy-in; it gets you to quit playing.
Encouraging players to purchase the expansion by offering the new content, new levels, new items, and new experiences is one thing. Forcing players to purchase an expansion because you've locked out old content, features, or game play systems is the shittiest version of pain-point conversion there is.