Except for the bugs, a lot of this sounds great to me. I haven’t played an MMO style pvp game since Interplay (yes, dial-up modem banks) and this is the first tine an MMO game description has sounded fun to me.
It was a lot of fun. The problem was more of a culture clash. You had a mix of RPers, CRPGers, and more standard gamers excited for PVP possibilities.
There were plenty of people in the first two camps who were into PVP, that wasn't a problem for most folks. It was the constant griefing, dealing with bug exploiting goons, being teabagged by people named things like AzZBlaSTA which really wore people down.
I ran with a very PVP oriented crowd. My experience was that 100% of them who describe the game in the specific ways the GP did were what caused the average player to throw up their hands and look for a much more controlled world. It's not that these were bad people per se, they were just playing a very different game than the rest of us and the two sides were never really going to get along.
Games with real risk? It requires an aggressive player to make that risk real otherwise there is no point to making a game with risk if everyone is just smithing horse shoes for each other.
I’d argue that games like UO don’t exist anymore because most people don’t want to play a game where you can lose everything.