[camlorn]

Eve online is using a specific modified version of python optimized for their use case, and the whole game isn't written in it. Also, they're using multiple servers:
And according to that article, apparently having problems. An Instance, in the MMO world, is a nebulous term; my instance can be across 1 server or 100 servers, and if I have enough money to throw at it, I could write it in any programming language by buying more computing power.
Java is now faster than python and can approach the speed of c/c++, provided that you don't do specific things. Pypy can do likewise in benchmarks, but benchmarks are the only place I've seen that personally for Pypy. Python will take at least twice as much ram as Java.
I only stated that Python may not be up to the task and that if one is using Python for such a project one probably wants to use Pypy. If you feel comfortable with Python and it meets your goals, great, just consider what you're going to do first. You can call into C, and that is one way of avoiding the problems, sometimes.
Also, Python uses a ton of memory, and since I apparently need to cite sources before people will believe that I might even have a point at all, this article, though sightly old, lays out the Python memory model and why it's so bad:

To implement Diku in python is fine. To implement certain dynamic features in python will give you trouble: aforementioned dynamic descriptions, possibly room-specific commands (this one depends on how you do it), your own custom mobprog system. I would say that half a Gig of ram is possibly too little for Python-based muds. If the productivity is worth it to you, then great and it's your choice, but someone does need to at least point out that python might be a problem depending on what you want to build and how many players you have.