Gnomeregan was merely a setback!
*looks around*
Oh, wait...

...

FUUUUUUUUUUU-

Actually, according to the Blizzard page:

A band of heroes took up the mission and returned with a tale of victory, but after analyzing the claim, Mekkatorque realized that the mechanized overlord defeated in the depths of the city was likely nothing more than a cleverly engineered facsimile of Thermaplugg.

So, not a setback, we were just tricked. They say something similar about the trolls; turns out that all those low level hordies bringing back Zalazane's head were duped by his magic, and came back with fakes that eventually reverted back to being coconuts. (Or the severed heads of his slaves...)

Kind of neat retcons, I guess; explains why those areas were never really reconquered, while at the same time not writing our past exploits out of the story.

Yeah, same thing with Zalazane and the trolls. His severed head turned out to be painted rocks and voodoo magic. The explanations are kind of neat if you go along with it. I think Blizz did a good job in that sense.

"They say something similar about the trolls; turns out that all those low level hordies bringing back Zalazane's head were duped by his magic, and came back with fakes that eventually reverted back to being coconuts."

Where'd you get the coconuts?

I found them.

was likely nothing more than a cleverly engineered facsimile of Thermaplugg.

facsimile - "2 : a system of transmitting and reproducing graphic matter (as printing or still pictures) by means of signals sent over telephone lines" ~Merriam-Webster

So we killed Thermplugg's fax machine!

"The swallow may fly south with the sun or the house martin or the plover may seek warmer climes in winter, yet these are not strangers to our land?"