The purpose of the crypt is unknown - it may be a playground for developers, a testing site of sorts, an unfinished instance, or something else entirely. It is interesting to note that using WoW Map Viewer you can see that the crypt runs under Tranquil Gardens Cemetery in Duskwood. This might play a role sometime in the future, or could be a complete coincidence.
This area used to be accessed via dying close to the gate and running through it, but this was changed in Patch 2.0.
Some people speculate that is a lower portion of Karazhan, as some lore indicated Karazhan has a lower half. But the architecture does not seem match with Karazhan in the slightest bit.
Inside the crypts, there's a persistent heartbeat. There are also many subzones such as Tome of the Unrepentant, The Upside-down Sinners, Well of the Forgotten and Pauper's Walk.