Why would the CryEngine be bad for MMOs?

Like I already said, there are many MMOs who use the CryEngine and here is a list of a few of them:
Aion
Entropia Universe
ASTA
ArcheAge
Warface
Mechwarrior Online
I wasn't aware of how many MMOs used CryEngine, however keep in mind a few things. The first is that Aion uses CryEngine 1, not 3. Aion was released in 2008, more than 4 years after its first use in Far Cry. At that point, it was no longer a new engine and the majority of those interested had computers with the capacity to play it.
The second thing is that the other games you've mentioned using CryEngine 3 haven't even been released yet. While I hate to sound cynical, it's possible that they could meet the same fate as Project D.
When I say that it's not practical, I'm not saying that it's technologically impractical. I'm saying that it's not practical from the aspect of availability. You look at WoW, the most played MMO in the world. Sure, it was released 6 years ago, but the graphics were outdated even for the time. One of the biggest reasons that WoW is so popular is because it's accessible, and will run on virtually any machine. If the game had been made using CryEngine or the Source engine, it wouldn't nearly have the popularity that it does today. If it used the CryEngine, while most computers today could run it, much fewer people would run it because they would have missed the boat. The ability to play it from the instant it becomes available is a big hook.