I agree with you on the character development. If character development is a critical feature, NWO is lacking. However, to some people the simplicity of building a character and lack of failure points that result in a bad build is a positive. Overall the social atmosphere in the game is more positive, supported largely by a good design from the NWO team.
As another poster said, I think it's really targeting a different audience, which I believe happens to be a much larger audience. The overlap is is very small for DDO regulars and maybe like 50% or more for casual DDO players.
I think their free-to-play model is superior which will help retain a larger # of free to play players through end game. For DDO, free to play is mostly a trial period unless you have a lot of time to grind.
As far as quests, character development, etc. I think DDO wins hands-down. However when I factor in the things that really frustrate me like guild decay, the advantage isn't really there. NWO did a good job of avoiding the type of mechanics that drive people away. At the moment I have just as much fun playing NWO as I do playing DDO. But I hope both games have continued success. There is room for both games and I like them both. I am glad the D&D setting appeals to so many people - it's one of the best games ever designed.