Think on it for a second: how many players would want to be Gambit, or the Hulk, or the Punisher? If even just two people, then there's a problem with identity. Even if you were to get around the problem with a suffix, i.e., Punisher213, then the brand has been diluted, and it no longer means anything. So, how would this MMO have worked?
Well, let's assume for the moment that you do, in fact, inhabit the game world with all your favorite Marvel characters. They're out there somewhere, and they have quests for you, a fledgling superhero. Would that be enough to provide a compelling experience? Hearing Cyclops tell you to get out there and take out the Marauders, one by one?
What if you could fight alongside your heroes? Duke it out with the Serpent Society, backed up by Thor, Hawkeye, and the Vision? If you can't be a Marvel character, does the Marvel brand still provide powerful resonance?
Or what if it worked like an instance, where you decide to be, say, Iron Man. Your guild affiliation is The Avengers, but you can solo. Every time you log in, you are the only Iron Man in that instance of the world, with other players becoming the other members of the Avengers roster (which is rather extensive, though certainly not in the millions). If we put a number cap of uniquely-named characters, let's say 200, is that still a massively multiplayer experience? What if other players could choose to be uniquely-named villains, rounding the number up to 400?
This could work. A pvp-based universe where each player is a unique Marvel character, inhabiting an instanced world where he is the only user playing that character, with other users playing that same character on other servers. An interesting idea, and something we haven't seen yet. You probably wouldn't be able to create alts, as that would bring the uniqueness down even further, to an even smaller number of users playing at any one time, but to step into the boots of Daredevil and actually be Matt Murdock is compelling.
Will we ever know if this is what they had in mind? And could DC be planning this as we speak?