Did everyone stop playing?

You can do it in WoW to a point, but it's not nearly as exciting.

Many, many people abuse it. Sometimes it's annoying. Sometimes it's amazingly fun. And having it as a mode completely ruins it.

That's basically what Origin did with UO. They created 2 facets (Felucca and Trammell). In Felucca, life was as always; you had to beware anything that moved. In Trammell, nobody could do anything bad to anybody else -- no attacking, no stealing from, etc, etc. Guess what? Everybody went to Trammell. Those that stayed in Felucca found it to be sparse and lacking in activity. Even providing the option makes the point of having it moot.

And you don't get people camping 'spawn points.' In UO, you can rez in town at a healer, at a wandering healer in the wild, at an ankh placed at a shrine or place of importance, or from anybody with enough magery or healing skill to do it. Sometimes, you get rez-killed, which is terribly annoying, but the solution is to either wait until the offender leaves or simply go somewhere else.

And, yes. You can totally jack their stuff.