The golden era of cafés here was a bit earlier than that. Late Quake 3, early CS. The MMO I remember people playing by the hour to play was Ultima Online, not WoW.
Still, those were fun and don't get as much nostalgia as arcades, for some reason.
If you wanted to offer the same "we'll run these on decent hardware you probably don't have today" each seat would be like 5 grand to build and you'd need to somehow power 20-30 1000W machines running all day, so that's a bit of a challenge when everybody has high speed internet. It was easier to do that when people either didn't have Internet at all or were on dial-up modems that couldn't sustain playable games at all. The hardware you couldn't afford then was networking, which was cheap to set up and maintain for LAN by comparison.