I saw there were a bunch of high quality discussions of the problems and development of H&H, but as the ideas I will present here aren't primarily about H&H I decided to create another topic for general discussion of the ideal, 'perfect', MMO(RPG), a pursue I believe H&H to also be about. I will first outline my criteria for an ideal MMO, following with an utopian view how these criteria could be fulfilled.
Personally I fancy the proposition of a perfect MMO as a challenge to create a set of game mechanics that make an immersive, enjoyable game that you get back to time and time again, without the need to pointlessly compete against other players through means of grinding or IRL trading, while maintaining a level of PvP among other types of player-to-player interaction. This proves to be a real challenge: traditionally in the MMORPG genre re-playability equals grinding, free trading equals IRL trading, and competition in skill levels equals botting. A usual response has been to either live with the problems or ban the players that use bots or do irl trading. This however doesn't solve the problems on the level of good game design.
At this point I'd like to review what steps H&H has taken in the development of the ideal game.
The most important quality no doubt is the sandbox world. In traditional static game worlds the game is pretty much over once you have been everywhere, after that it's just repetition. Dynamic world creates re-playability, because you can always discover new locations, that simply weren't there before! It also adds to the immersion and meaningfulness of the game: you can really affect what the game is.
The second aspect that differentiates H&H from it's forefathers is the open PvP and permanent death. The idea that you can lose all progress on your character at any time really gives perspective to the game: you don't want to waste time doing stuff you don't enjoy just to get higher levels, unless you see some concrete benefit in it: if I get this done, I can do that, which would be awesome. Re-playability in grinding has suddenly become more meaningful, through the notion of permanent death. Permanent death also devalues irl trading as an option to progress faster in the game.
With a dynamic world and permanent death, we are much closer to the ideal MMO. All that remain are the problems of grinding and botting.
The thing with bots is that they play the game when there is no player around. The need to have bots comes from the foundation of modern RPGs: character progression. The more you play, the better your character is and the more stuff you can do. My solution is: delete the log out button. Let all player created characters be bots. This way the player's game is to just "program" the character to do stuff while the player is gone and when you get back to actually play the game, you can either go on an adventure or program your bot to do something else. This way you can have character progression, but no cheater can gain an unfair advantage.
This has been in fact utilized in some MMO strategy & resource-management games, Travian being the one I've tried myself. I think they lack proper player-to-player interaction (beyond trading and raiding there's none), and there isn't really a world to explore: they aren't RPG games, but online excel sheets with a nice looking GUI. But no one has yet managed to use bots to play these games.
The problem with grinding is also based on the need for character progression. Dynamic world and permanent death change the way we do grinding, but the problem remains: after a while administrating your bot day after day, just to be able to do something in the game, be that crafting a new item, starting a new quest or just mere competition among other players, becomes an endless cycle of madness. My solution is to shift the focus from character progression to faction, village, clan or guild progression. This way your personal time investment doesn't go to your character, but to a pool towards a common goal. This would create meaningful player-to-player interaction, with cooperation and PvP, or now, faction versus faction.
This has, to some extent, succeeded in H&H. But here villages are just means to become better individuals, instead of individuals being the means to become a better village. Eventually the ideal would lead us to a game where the player doesn't own their character, but can effectively play any character the faction owns, and if he doesn't feel like playing, he can just drop out for a while without losing anything personally.
So here you have it, some ideas to you future mmorpg game developers.