Unlike most expansion locations, Dalaran has remained relevant to World of Warcraft well after we first went there (or at least really into the city - as it's technically been in-game since vanilla, only before Wrath it was a bubble in Hillsbrad Foothills.) This ancient city - the only Human "Kingdom" with no hereditary monarch - was conveniently uprooted, allowing the entire city to essentially serve as a moving crisis response unit.
When we first arrived there, Dalaran was under the leadership of Rhonin. But when Garrosh had Theramore destroyed, the archmage gave his life to save his colleague, Jaina Proudmoore, shoving her through a portal right before the bomb went off.
Jaina would go onto to become the new leader of Dalaran. And while she had spent the previous several years ruling over the city-state she had founded, and by rights, she really ought to be Queen of Kul Tiras (wherever it is,) Jaina was also a key member of the Kirin Tor. She was Archmage Antonidas' apprentice, and she was clearly being groomed to take over for him (assuming she wasn't wed to Arthas to be the queen of Lordaeron.)
Jaina was always one of the Alliance's strongest advocates for peace with the Horde. With Thrall as Warchief, she managed to broker peaceful cooperation between Theramore and Orgrimmar - which were both founded around the same time. Indeed, after being united in battle by Medivh, Jaina and Thrall were actually pretty good friends.
Things started to go to hell after the Wrath Gate incident. Jaina tried to keep things under control, but after seeing the hideous atrocities committed in the Undercity - even after accounting for the fact that Putress and Varimathras were not technically operating for Horde, or even Sylvanas' interests - Varian really threw down the gauntlet, and the war between the Alliance and Horde that would eventually end at the Siege of Orgrimmar began.
Still, it was the appointment of Garrosh Hellscream as Warchief that really kicked the war into gear (one could actually interpret this somewhat more sympathetically to Thrall - with Varian threatening war, Thrall might have felt he had no choice but to put someone who would ensure the Horde was on the offensive, rather than defense.) And probably the most infamous act in that war (well, perhaps aside from the destruction of the Vale of Eternal Blossoms) was the sudden obliteration of Theramore. While it certainly made sense as a military target - Theramore's forces might not have engaged the Horde, but they were certainly aiding the Alliance war effort in their push into the Barrens - the utter destruction of a city that had, for a time, represented the hope for peace was, well, pretty damn nasty.
But the thing that one should remember is that this is not what turned Jaina away from the path of peace. Re-situated in Dalaran, she essentially tried to make the floating city a fulfillment of the hopes that Theramore had represented. Dalaran had been instrumental in the efforts to defeat Malygos and the Lich King, and while there was definitely an Alliance and a Horde side of town, it was a place where people set aside these differences to work together. Humans and Blood Elves, living side by side, and it all looked everyone there genuinely believed in cooperation.
But Dalaran was used by some Horde elements to help Garrosh in his attempts to secure a weapon of mass destruction - something he might be able to wield to similarly devastating power as the Focusing Iris (the artifact used in the creation of the mana-bomb.)
Jaina didn't know who was ultimately responsible, but it was clearly a member or members of the Horde. And let's remember that Dalaran was an Alliance city to begin with. Even with the long history between the Humans and High Elves (who would become the Blood Elves,) the Horde was allowed there under the assumption that they would use the city to aid in the defense of common interests.
Jaina's reaction was not great. Rather than a thorough investigation to find the specific perpetrators, or even simply expelling the Horde from Dalaran, she rounded up all the Horde citizens and tossed them in the Violet Hold (and allowed those who resisted arrest to be killed.)
This was not a good move, and it actually wound up scuttling a deal Varian and Lorthemar had been working on to get the Blood Elves back into the Alliance (something that clearly couldn't happen for gameplay reasons, but is pretty interesting story-wise.)
But I reject the notion that Jaina has somehow gone "evil." Jaina's actions would be considered totally acceptable for pretty much any other Alliance leader. It's just that her history as the advocate of peace makes this shocking. But damn if the Horde didn't earn her ire. It's kind of amazing that she held back for as long as she did.
As of 5.1, Dalaran became lore-wise an Alliance-only city. In fact, there was originally a plan to see Dalaran bombarding Orgrimmar from above during the Siege (this was cut because rendering two cities, one on top of the other, would have been terrible for peoples' computers.)
But in Legion, Dalaran will become a neutral city once again, and we'll even have a new version of it in the Broken Isles (the old one in Northrend will remain, though it'll be updated so that the two versions look the same.) And it won't be Jaina in charge of the city, but Khadgar.
Now Khadgar's certainly got the credentials to run Dalaran. In fact, technically the Kirin Tor are supposed to be run by a council, rather than a single Archmage. The real question is what brings about this transition (well, other than a massive demonic invasion.)
Jaina did start to mellow a bit as early as the Isle of Thunder. She and Lorthemar agreed to walk away from a potential conflict at Taran Zhu's insistence, which is growth! Sure, she was still calling for the dismantlement of the Horde at the end of the Siege, but she wasn't necessarily saying "kill all those people." So far, allowing the Horde to persist has been ok (I view Ashran as essentially non-canon.) Both sides fought together with little incident at the Dark Portal, and pretty much didn't even see each other through most of Draenor (our local allies, the Frostwolves and universe-B Draenei, had no reason to dislike each other, so no real problems there.)
I think it would be a real shame to have Jaina devolve into some "corrupted" villain. She had a big, angry outburst, but by the standards we tend to hold Warcraft heroes, one could hardly consider her actions evil. In fact, she represents a certain righteous anger in the Alliance that is sorely needed to allow the Alliance some pro-active plots. We need an Alliance that hits back just as hard as it takes them, and while the Alliance/Horde conflict has receded into the background (thank the light,) I'm perfectly happy to have angry Jaina as a strong force within the Alliance.
Some reconciliation would be ok, though. A rapprochement between the Alliance and Horde could help with this transition. In fact, it could be as simple as the peace treaty signed at the end of the Siege of Orgrimmar having the release of the Blood Elf prisoners in the Violet Hold as part of its terms.
And Jaina, perhaps worried that the Alliance is just setting itself up for betrayal, might resign from Dalaran in frustration. That's not evil. That's just knowing when to fold 'em.