The Empire codebase is similar to what you're describing, and I think there's a current RP-focused Empire mud up called LorenMUD.
This reminds me of a story the developer of the Godwars code told. In his second or third game he created a dynamic wilderness where players could claim grid tiles, build roads, settlements, etc. The world was completely player created. The game wasn't open for more than a few days before the players had 'built' giant penises and written certain choice words across the world in giant grid tile letters.
Developers and players often have different ideas of what's fun.