I have personally seen many kinds of behavior on BGs and the stories I've heard...Especially on private vanilla/TBC servers where each multibox account don't cost money and leveling is fast there are loads of abuse and honor farming. Yes, people do bother with it and things can be minmaxed and optimized to make it profitable thus why people do it.
I wouldn't bring up, or honestly care about private servers, that really isn't a symbol of how detrimental something is to the gameplay in the actual game.
Most of the money gold farmers make is farming low level things like rare pets or gathering materials, these are things that are easier to bot and don't even require multiple accounts, multiboxing doesn't serve much of a practical purpose that I can honestly see.
Note that even when you say multiboxer "one shots people for fun" you have to understand it still ruins the gameplay experience for those other people and this is unwanted and problematic behavior. It arises quite a bit of discussion, but Blizzard allows it. The only thing that keeps multiboxing marginal and saves retail WoW from it is that you'd need to pay subscription fees for each of the accounts and not many people want to invest in it.
No offense but I'd make a stark contrast between people actually making game breaking abuse out of multiple accounts and people just being jerks with it. People being jerks with it is something the OP obviously would not have to tolerate in their game, I would say people being annoying is much less important than physically detrimenting the game or its economy as well.
The multiboxing scene is far more blown out than what you might think from your everyday experience in WoW because there are simply so many players that do not multibox. Multiboxers actually try to keep what they do secret in order to avoid player griefing. And yes, instances can be multiboxed as well and it happens in current WoW. People use setups like 1 tank, 1 healer and 3 identical dps with keyboard software and macros to practically control all chars from single screen:
Honestly even if someone has the ability to run every instance with one computer, you get little out of instances besides gear, perhaps enchant materials, and multiboxing isn't botting, you still have one person having to tediously run the entire dungeon over and over. Not to mention in actual WoW there are limits on most of the good things you can get like the lockouts on heroics unless you random queue.
The only place that makes any kind of tangible money from instances in WoW would be raiding, and if you can show me a multiboxer or multiboxers that can raid I would say they deserve that money because that would be a feat of epic proportions.
Anyway this whole conversation doesn't apply that well, multiboxing only works on games like WoW where its a dynamic combat based world where you actually get useful ability out of synching up attacks and such, it's not like it would help for farmville or something.