-The most important question is, I think, will TES:O still be a "TES" game? (Will it Blend?)
TES games have certain unique characteristics that make them special (freedom to do what you want is probably a nice summary). Will this translate to an MMO? I think it could, but you'd need to make a pretty unique MMO. As far as I can tell, that's unfortunately not the direction they seem to be going.
-Will it fail or succeed?
Hard to answer. First, what determines failure/succes? Financially speaking, they'll need a certain amount of players to make a profit. If they make a half-decent MMO with the advantage of a strong name, I see no reason why they would not be able to achieve this.
However, there could be more to succes/failure. What will TES:O do for (or against) the value of the IP? Is this meant to be played by TES fans, winning them over to an MMO, or is it an attempt to get MMO fans to play TES?
From what I've seen so far, the latter seems more likely. Which I think is a shame, there's enough MMO's to cater to MMO fans already. There's a severe lack of MMO's for people who like a true "sandbox" experience, something a properly done TES MMO could be fantastic at...
-Will I play it?
Not sure yet... I'll keep an eye on it's development for sure. I'll try and get into the beta if/when it's announced. But if it's just another MMO with some TES " detailing", no. I'm done with run-off-the-mill MMO's. Recently I gave SWTOR a chance, and while I can't really say it's a bad game, I just got terribly bored terribly quick. They tried to put the RPG back into MMORPG, but what they did was make a game that consists in general of a single player game and a multiplayer game glued together.
What I would play is an MMORPG that creates a huge, vibrant, interesting and dynamic online "world" where I can do whatever I want with my character (within reason). I don't care about gear progression, dungeon progression, PVP ratings, balance, loot, instant gratification, achievments, and so on and so forth. I would like an Elder Scrolls Universe Simulator. For those who remember the original Star Wars Galaxies: an evolution of that original concept would be perfect for an Elder Scrolls MMO, I think...