One idea in the past has been to have procedural content - that is content that is automatically produced. Unfortunately the automation doesn't produce enough variety and quality that hand-crafted content can. But now that we're seeing the limits of hand-crafted variety, perhaps we should look again at procedural content. This time, though, let's make it a hybrid. Create the content the same, but instead have the content scaled in size, scope, difficulty, etc to the players. Therefore there is in every encounter the option to solo, small group, large group, and in select cases, raid. Rewards should be tailored to the group size to some extent - incentivizing a larger group over a solo - since soloing would by nature be easier.
LOTROs prospects of the dynamic instancing is the first step towards this road. I don't think LOTRO will ever see the full vision of dynamic content - that is scalable content everywhere. The game would require total overhaul and essentially become a new game. But the instancing content could certainly be redesigned with this type of technology without greatly upsetting the world so far built.
In the future (a LOTRO 2?) I'd love to see dynamic content be the driving force behind a new game. Companies are experimenting with more casual and more hardcore games, different settings, different leveling systems. What made MMOs attractive in the first place? The people playing together - ultimately anything that eases togetherness in an MMO is something that will further the genre. Dynamic content could be just the thing.
Post inspired by a post at Kill Ten Rats.