Do I think that real-time combat is the only answer? No. While I love that type of gameplay, there is definitely something to be said for the combat styles of Everquest, Everquest II, World of Warcraft and the upcoming Warhammer Online. However, to maintain overall player interest, traditional combat in MMOs seriously needs to evolve.
The Cinematic Experience
The first thing that can be done -- and something that real-time combat cannot do -- is to give the traditional method a much more cinematic feel. The first MMO to really pull me into its combat sequences was Final Fantasy XI and I think developers can learn quite a lot from FFXI's combat camera and music as well.
The basic combat experience in FFXI was that whenever you initiated in battle, the game camera would adjust slightly and unique combat-only music would start to play. This sort of thing really added to the overall immersion of being in the world of Vana'diel.
Someone (are you listening developers?) should extrapolate on this by creating a camera system that would swoop around characters or tighten up a bit for special attacks. The trick here is to remember that FFXI locked players' facing, so even if they moved around they were still facing their designated target. This allows players to still feel in control, while giving the developer an opportunity to create some compelling camera shots.
Just imagine how awesome a critical hit would look, if just as the enemy was being struck, the camera tightened on their faces -- maybe even their pained expression?
The possibilities are superbly vast with this type of system. Once you factor in concepts like written sound effects, specifically chosen music scores or even camera filters -- this vision of cinematic combat starts to open up.
It's important to point out that cinematic combat should not ruin the player's fun. It should only enhance their experience. Just because the developer has wrested a tiny bit of control from the player's hands does not mean developers should go hog-wild with the "wacky effects" as it were. In fact, the very opposite kind of mind-set would probably be best. Cautious implementation, slow and steady through development.
We're constantly hearing MMO developers talking about "dynamically created content" or whatever the recent buzzword happens to be at the time. What about sprucing up our user interfaces some more, or applying a fresh coat of paint to how combat (or the entire game) is presented?
That's what World of Warcraft did in spades when it fist came out. It took tried-and-true concepts and made them not only work better, but work in a fashion that was far more visually, audibly and all-around aesthetically appealing.
It's easy to throw around words like "polish" and "refinement" without actually understanding what they mean. Sometimes, putting that extra shine on a game is more than class and level progression balancing. I honestly wish a developer would go out of their way to improve combat presentation, because as it stands now I'm feeling less and less excited about games like WAR, where the combat just looks like more of the usual.