Yes well, this has been a problem with the whole idea of Children's MMOs from the beginning. They tend to forget that kids aren't mature for one, and then try and keep things ultra-sanitized which makes them prohibitive and ensures nobody, especially the kids, wants to play. Not to mention that even very childlike IPs tend to attract adult players and for some reason that wierds people out.
Lego Universe, Disney's "Pirates Of The Caribbean MMO", and Disney's "Pixie Hollow MMO" all apparently met this fate. Concerns over content allegedly lead to the cancellation of both a "Disney Princesses Online" and general "Disney Universe" MMO as well but the last two were only projects people heard about being in development.
When "Pirates" launched I tried it, and found it included some truly odd things, namely the fact that your pirate character could not shoot *people* with guns, you could only use your pistols on animals (crabs, etc...), apparently in response to all of the post-columbine gun fear. "Pixie Hollow" which was based on the Tinkerbell movies/universe allegedly attracted numerous adult players of both genders (some guys do like fairies and collect statues and artwork and such) and while that wasn't a problem it apparently lead to some creepy behavior including a lot of lesbian stuff not just among pervy guys, but apparently women trying to lure young girls, and of course some young girls themselves goofing off, but it wound up not fitting with the Disney image. Allegedly they wound up having mods combing all of the chat and message logs, considering dropping outfits from the game (which was an issue since collecting and/or buying them and stuff from your house was a big part of it), and all kinds of other stuff. Supposedly there were concerns over the same thing potentially happening with a full featured Princess MMO, and a general Disney themed MMO where you could visit various Disney worlds (similar to Kingdom Hearts) had similar concerns over content. One of their alleged examples was that if say the game lets a character crouch it's impossible for the mods to catch everyone to say wants to crouch their head into the crotch of another model and start typing or emoting "slurp, slurp" which is why Disney has sort of backed away from MMO development.
Personally I find it kind of sad, since I figure the whole "online interactions might vary" thing covers most of that and nobody is naïve about MMOs or The Internet anymore. You create an environment for kids to be kids and you need to expect immaturity to reign in particular.
That said while I did hear some allegations over moderation and content with Lego Universe (which is similar to other youth-based games I mentioned), I also heard that there was some concern over the rate at which the user base blew through the content, a typical MMO problem. Despite the release of a Ninjago expansion they felt there was no viable way to maintain the game and produce content fast enough, which was a problem since they apparently had the vision of this being a huge mountain of money waiting to fall on them with minimal work. Lego did upset a lot of people by pulling the game as well, I seem to remember letters from POed parents making their way onto the internet talking about how while they were a business that it's wrong to try and forge a relationship with children the way they went out of their way to do, and then scrap things for the most mercenary of reasons, not that Lego seemed to really care mind you.
Disney being at the helm has also kind of dashed my hopes of ever seeing another attempt at a Star Wars MMO. I really liked Galaxies (was there as Stryper Stormcrest... that's pronounced Striper by the way not Stripper, on Eclipse Server I think it was), and while I haven't played for quite a while I really enjoyed playing through a couple of the "Old Republic" storylines, I felt some way of combining the merits of those two games would be awesome, especially with the new movies coming out.... but Disney seems to be full of control freaks and I doubt they would tolerate even a fraction of the interactions I've seen in either game.
Nothing especially relevant in my rambling, just saying I've heard a lot of this before, and it's not an uncommon problem. Some people might be surprised to know that there were other cancelled games with allegedly similar issues. I've found most people don't even know "Pixie Hollow" was even a thing (and before you ask, no I did not play that one, despite liking fantasy in all it's forms, and even having some statues of fairies and such, though I did briefly try "Pirates" before deciding it was banal and quitting).
