One of the huge draws of the Elder Scrolls universe, is that as the only playable character in the game, you had a dramatic effect on the world. You completed quests that you felt like, you could totally ignore the storyline if you so pleased. As you accomplished things in the world, and revisited old locales, people knew of your deeds and you could see the change that you affected.
This is all not something that can be replicated in an MMO. There are 10,000 other 'unique' heroes all trying to affect the world at the same time, and really we all know MMO's cater to the end-game. This doesn't jive with the Elder Scrolls formula. The 'End Game' in a single player Elder Scrolls game was the entire journey, the open sandbox fantasy world that you
lived in. An MMO doesn't work that way. You can't be special in an MMO through completing quests and adventuring. The only way to break you out as special in an mmo is usually by gear and other garbage like that, reflecting how much time you spend in the game, not by the story you carved for yourself in the world.
What I loved about Oblivion and Skyrim was that I basically got to create my own epic tale of adventure and do what I want and see how even the smallest action of mine had a real effect on a living world. This is far and away a very different thing than what an MMO can accomplish. From what I experienced with the beta, it's just another MMO, it's not what made Elder Scrolls fantastic. I genuinely hope that they can figure out the feel of the game before its release, because it would be awesome if they could bring the Elder Scrolls experience to an MMO, but when you think about it long and hard, MMO's and single player fantasy RPGs have different objectives that just don't overlap enough.
Most of the feedback I saw from the beta came down to this: MMO fans think it's not MMO enough, and ES fans think it's not ES enough. They picked two divergent gaming experiences and tried to please everyone... That's usually not a recipe for success.
I hope I'm totally wrong and they blow it out of the water when it comes out though! If not, I can still play Skyrim forever!