It's not well known, but I think the Blackthane fiction has some great potential to be an MMO. It's a pet project of a friend's. He's writing a book about it.
Anyhow, I'd like to see LMOs, where 20 to 40 dedicated people get together to play key characters in an on-going war. Using a system of automated resource checks, they spend less time questing than they do exploring and engaging in actual battle with the enemy forces.
The goal would be a tug of war with the resource system, for more than anything else, wars are won with money. And what is money than resources? So key battles are scheduled as the game progresses, and the players can choose to show up there or not; if there are human players, the tides are likely to be turned in SW:BF2-esque clashes filled with NPCs and such.
The more resources a faction has, the more NPC's they can afford to arm and put on the lines, the stronger they become. Of course, eventually it would have to end, but utilizing a few faux pas they could string it out for several months.
And instead of simply disabling your character and taking away your goodies, you could be left as-is, and your server 'advanced' to a new stage of difficulty, or even just reset save your goodies and stats. This way the grind is directly relevant to the development of the world you're playing in.
In this way, cities might come to be taken over (imagine the Orcs taking Stormwind for good, or mankind Orgrimmar, and it actually sticking (unless it was taken back)), and simple aesthetic changes, like banners and populous, could identify which side is occupying.
The story wouldn't have to be overly complex; Your side is warring with their side for X reason. Figure religion, politik, or culture into it. One side doesn't even have to be good and evil; maybe it's a feud over the royal bloodline. Weirder shit has been fought over.
One of the fun features of the game might be an independent ranking system in which determines the alpha males among players, and give the leaders the oppurtunities to go on conquests or simply Sherman-like rampages, in which fields and villages are burned and the common folk slaughtered, if only to win a victory of morale rather than sheer battlefield tactic.
I think that would be fun. It would require some dedication certainly, but if you could throw an hour a night into it, and I think anyone could do that, it would never be the same story, and since the questing land doesn't have to be gi-fucking-gantic, the graphics could be touched up quite a bit.
P.S. In fact, you could even have presets of several kinds of terrain; flatlands, hilly, winter, summer, etc. Throw a fable or real time night cycle in there and you've really got something coming together, I think. Give it an actual map-editor a la Sins of a Solar Empire and you could be onto something!