Well I'm certainly doing some of the things you describe - a room-less world with automatically generated descriptions (much inspired by Nathan Yospe's PhysMUD, which you also mentioned in your post). I'll probably add generated settlements in the future as well, but I'm not interested in taking the "simulation of life" approach, or adding an economy or such.
My comments were really in response to your statement "...but I see no reason that it could not be done by someone with the motivation and the skill", as I can see a number of reasons why people would choose not to go that route, even if they had the motivation and skill to do so. I'm not saying it can't be done (because obviously it can - I've done part of it myself), only that many people wouldn't consider it worth doing.
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