It's definitely possible. WotLK modding is incredibly advanced. However, it would take a lot of work.
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Yes.
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Lets assume we are playing on icecrown, its full of donors,now imagine donors with transmoged gear(assuming u would have to pay xmog with coins), they would donor bash ppl in bgs, and pve would feel like playing some weird girl game where u pick clothes for your barbie doll... i personally would quit. On lordearon xmog will never happen because its blizzlike server.
Maybe more than enough people will be ready to use coins for transmog. Seeing how often it is asked for, i believe they will. Also, it shouldn't be that complicated to put in on the website, but maybe i'm wrong. Having that in mind, i certainly prefer fixing bugs over transmog, but what if the system is already coded, and waiting for eventual release? What if the person who could put it on website isn't responsible for fixing bugs?
So many questions, yet we know nothing.
The person responsible about putting it up on the website, Edifice (as far as we know) is responsible of working on all other website systems, including parts of armory. Since it is thru website, all appearences would have to have their codes, transfers, applications, ingame appearences, costs and much more set and completed, bug checked, compatibility checked etc.