They didn't do a COMPLETE rebuild, but they did redo all of the 1-60 content that was in the original game. Some of it's the same, but most of it has been changed. So in a way, they did do a rebuild. I'm not sure why people are migrating to Rift because it's basically the same damn game with some minor differences and an inferior look... Maybe those minor differences are enough, I don't know.
I do think there's some definite WoW burnout going on though. I think TOR is really going to get a lot of players who are just looking for something new and not necessarily in a fantasy setting. I know I wish Star Trek Online had been more fun, but alas, it wasn't. I'm MMO-less right now after cancelling my WoW account a couple months ago and I know I want something, but Rift just ain't it.
Edit: Oh, and they have stated time and again that their new MMO is NOT World of Starcraft. It'll be interesting to see if that holds true or not, but I don't think they'll go that route personally.