It was a proper hack, using a real exploit:
The last thing you expect to see when walking into World of Warcraft's many towns and villages is a pile of skeletons stretching as far as the eye can see. Yet that's exactly what some players encountered yesterday morning after hackers found an exploit that let them kill every player and non-player character in the towns of Stormwind and Orgrimmar.Of course, the programmers should have known that these commands would not stay secret. Fortunately, Blizzard has taken aggressive action, closing the security hole and tracking down the hackers. The penalties are, as you'd imagine, severe.
The massacre apparently resulted from a previously unseen exploit that let level one characters access the kill commands for every player and computer-controlled character in the area. A few quick-witted players managed to record video of the massacre as it was happening, showing characters dropping left and right in the formerly safe confines of the cities.