Bear in mind that I never played the original Warcraft, and mostly stuck to things like Final Liberation with regard to 40k, so take this with a grain of salt.
Warcraft, like the modern RTSs that it heavily influenced, was about small numbers of units and fast thinking. The individual.
Warhammer is all about large scale battles and strategy. The army.
So that could be problematic. GW obviously did the fancy video games to drum up interest in the tabletop game. The tabletop game being all about buying lots of miniatures from GW...
Can you see how an emphasis on small skirmishes and the like could have potentially been bad for GW's pocket? :p
Ironically, Warcraft/Starcraft have evolved into a game about building armies and planning every minutiae of detail, whereas Relic's 40k games have grown to be about controlling small numbers of units and rapidly reacting to the enemy. :p

Warcraft was clunky as hell. Well, it was clunky as hell 15 years ago. Never mind now. No right click orders. Or even left click orders for that matter. You had to select one of the possible orders (yes, even Move) from the bottom menu.
I can understand why Games Workshop might have struggled to see the potential for it.
That said, Games Workshop usually covers everything from smaller skirmishes through to large battles. So I don't see unit numbers as being a major problem for them. Especially seeing as they usually encourage people to start out with a few units and go from there.
The base building might have been an issue though. Bases are merely scenery in Games Workshop games and that might partly be why it was dropped in DoW2.

You could also only select like 6 units at a time.

Hell, I didn't even know you could have more than six units at a time in that game. :D But yeah, the sequel was such a massive improvement in every way.

I'm in exactly the same position. I never actually owned a copy, but that didn't stop me from playing it a hell of a lot back in the day. It's one of those games I wonder why I never actually bought.

It's not just the gameplay that's so darned similar between WC and Warhammer, the entire art direction and style of the races, especially Orcs/Orks, is so blatantly based on the Warhammer stuff. Some of this was still obvious in WOW years ago when I played it.

Are you sure that Warhammer was the first to use that style of Orc? I thought both GW and Blizzard were ripping off the even older Dungeons and Dragons tabletop orcs.

Me happy :)

Who were ripping off tolkien who was likely ripping off someone else.
The only really unique thing about Warhammer orks is that they're essentially soccer hooligans with dakka & choppas

That description is both hilarious and dead bang correct.

Speaking of them, some kustom orky PC case could look very interesting. Built from metal scrap, some glyph or a picture here or there.....

...and that they are actually plants.

Oh yeah, the fungus thing. That somehow has red blood now...