First off: How is it impossible to explain in TES Lore, that new settlements are foundet or that cities grow getting new districts added? Housing/settlements are difficult in TES:O context because of a lot more technical reasons. Lore is no reason at all to say housing can't be done.
You also take the OP far too serious and too much by his word when he talks about world building as you can do it in Otherland. Of course such stuff makes no sense at all in TES:O, still elements of that for example when talking about mining could be worthwhile additions.
Also remember that sandbox does not necessarily mean dynamic world. The world in TES games allways was a static thing. Still they're considered sandbox games, because of the non-linear storyline and the dynamic in player-NPC and Player-Faction relationships.
At this point regardless of the fact that we know that the gameplay will be point and click with skillbar and we we most likely will not see housing at release, there's still a lot of room for sandbox elements from TES single player to be adopted in TES:O. For instance instead of having instanced battlegrounds they could take an open PvP approach enabling Guilds/Clans to take control over the various castles in world. That is a degree of freedom that adds sandbox feeling as the players choose where they fight and with how many people and they can call in reinforcements if need be. Or add more factions in the coming year and allow for dynamic change in play-faction relationships. And don't you come and tell me "That's impossible in MMO's" because I've played MMOs that did it just fine.
In my opinion Open PvP in the non-instanced world and non-instanced PvE are a must have if a MMORPG wants to earn that title. It's schizophrenic to talk about massively multiplayer if most worthwhile activities (raiding dungeons for loot and PvPing) are limited to 8 or 16 players. That's why I didn't like WoW from the get go it simply was Diablo with proffessions added. Having instances limited to 8 players did not sound the least bit interesting. I still do not like those games for that very reason, though I played a few, but I usually don't stick around for long.
Instancing is a fine and easy way to be able to brag about thousands of players on the same server without having to think about the problem, that the game world in reality is not even close to being large enough for that number of players.
You also take the OP far too serious and too much by his word when he talks about world building as you can do it in Otherland. Of course such stuff makes no sense at all in TES:O, still elements of that for example when talking about mining could be worthwhile additions.
Also remember that sandbox does not necessarily mean dynamic world. The world in TES games allways was a static thing. Still they're considered sandbox games, because of the non-linear storyline and the dynamic in player-NPC and Player-Faction relationships.
At this point regardless of the fact that we know that the gameplay will be point and click with skillbar and we we most likely will not see housing at release, there's still a lot of room for sandbox elements from TES single player to be adopted in TES:O. For instance instead of having instanced battlegrounds they could take an open PvP approach enabling Guilds/Clans to take control over the various castles in world. That is a degree of freedom that adds sandbox feeling as the players choose where they fight and with how many people and they can call in reinforcements if need be. Or add more factions in the coming year and allow for dynamic change in play-faction relationships. And don't you come and tell me "That's impossible in MMO's" because I've played MMOs that did it just fine.
In my opinion Open PvP in the non-instanced world and non-instanced PvE are a must have if a MMORPG wants to earn that title. It's schizophrenic to talk about massively multiplayer if most worthwhile activities (raiding dungeons for loot and PvPing) are limited to 8 or 16 players. That's why I didn't like WoW from the get go it simply was Diablo with proffessions added. Having instances limited to 8 players did not sound the least bit interesting. I still do not like those games for that very reason, though I played a few, but I usually don't stick around for long.
Instancing is a fine and easy way to be able to brag about thousands of players on the same server without having to think about the problem, that the game world in reality is not even close to being large enough for that number of players.
Basically, the reason I don't care about derivative MMO's is because I don't care about min/maxxing characters or grinding gear. I get to the end of the content and I'm done if it's a theme park. The only MMO's I played a long time (Ultimate Online/Eve) weren't theme parks, so I never ran out of compelling things to do.
I've spent god only knows how long collecting every book in the game world and every alchemical ingredient and arranging them carefully in my HOUSE. I've done this in every TES game. I spent who knows how long pirating people in low security space in Eve Online. There is no telling how many trees I cut down or RPK'ers I killed in UO, it was alot. I played DAoC for a pretty extended period of time prior to Trials of Atlantis. It was not nearly as entertaining as the other things on my list, but it was still alot of fun, due to the open world sandbox PvP and the fact that the BEST gear in the game was player crafted.
What makes me hate WoW/EQ derived games in the genre is the concept of: "Ok, now you're at the level/character skill cap, grind gear FOREVER through either PvP or PvE; we'll release new better gear every 3 months, and the only content you have is the content the developers add every once in a blue moon." That's not compelling to me at all. So, in order for me to remain interested in an MMO I must have a large variety of *non-progression* activities that are fun, and feel *meaningful* in the context of the game world. This ends up being "sandbox" content. I have over 500 hours in Skyrim and it only came out last year, certainly I finished all the scripted content long ago. I still encounter crazy things I've never seen before wandering the wilderness because of the in-depth non-combat AI and emergent gameplay features.
I don't think a dragon was supposed to attack General Tullius while he gave a rousing speech in front of Windhelm, but that happened to my last character. That sort of stuff never gets old.