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The problem is that there is just so much information about real-world history. With a made-up theme, you can invent the world yourself. Even with a Tolkien or WoT theme, there are huge amounts of the world and history which is uncharted - which allows for setting creativity. You suggested that Medieval/fantasy muds might be due to lack of imagination, but such settings require more imagination, because nothing is set in stone - the game world is based entirely on the imagination of the game developer. Moreover, as I said before, because the information is all made up by the game world creator, the players can't look up the information themselves. This forces players to explore the unknown if they want to learn more about the game world - or perhaps read the journals and exploits of other players.
As I said previously, a historical setting can work fine, but I prefer to play within a fictional one - and when I create a mud world, I like it to come from the imagination of myself and my fellow developers, not from a book.
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