One has to realize that the primary focus of any game is to sell copies or retain subscriptions. You aren't buying a book, whose entire appeal lies within the story. No, you have to build your gameplay systems on top of one another, and then tailor your lore to fit the gameplay. Sometimes it doesn't work too well within constraints of canon. In World of Warcraft, you can murder Illidan as well as Kael'Thas over... and over... and over. You can raid and kill the rulers of cities, only to have them respawn a few hours later. It makes for a very static, depressingly non-interactive setting.
At the complete opposite of the spectrum you have EVE Online, which has the story almost dictated by the players. Sure, in the 1.0 systems there are nations and corporations that actually further an official story, but all in all, it is the players in the 0.0 systems that determine the course of the universe. Corporations go to war, stations are destroyed, and leaders and murdered. The problem with this is that it leads to a very anarchic world. If you can change anything, for the worse or better, you'll end up with complete anarchy.
I suppose that my thoughts are that City of Heroes, Lord of the Rings Online, and the upcoming Warhammer Online: Age of Reckoning are the ones to balance the anarchic freedom of EVE with the static nature of World of Warcraft. In all of these games, there is a rich universe that you mostly can't change, much like World of Warcraft. However, you can create profiles and histories for your characters, breathing life into them as more than just stats and equipment. Also, each game has ways to genuinely influence the game world, but not in the radical way that EVE Online promotes. City of Heroes has the bases, power constantly shifting based on who owns the items of power. It also has an upcoming story arc creator, allowing players to make new stories within the constraints of the universe. Lord of the Rings Online has the players going on epic quests that affect the story of the Fellowship. And the upcoming Warhammer Online has the amazing Realm vs Realm and sieges that allow you to destroy enemy towns.
It's hard to balance gameplay, fairness, and story, but in the end, that's what impresses people and gets them to play. As our tastes as gamers deepens, so will our thirst for good stories that can be influenced properly by the player. And once we reach that point, World of Warcraft will have to evolve or fall.
Each week James Murff writes Under The Hood, a deeper look at MMO game mechanics and how they affect players, games, and the industry