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An MMO where all content is created by players using a wiki-like interface. Editing privilege is tied to a "creation skill" that levels up with each approved editing action.

Worldbuilding as a game mechanic could be amazing. I have this totally evidenced belief that there are tons of people who are master worldbuilders and are poor at writing fiction/narrative or dislike doing so. I'd love to find a way to open up content creation to such a demographic.

Didn't Neal Stephenson try something like this? Google is failing me on this, but I swear he tried doing some wiki based community built world.

I believe you may be thinking of the The Mongoliad[0], which was a communal narrative effort he founded/was in involved in. I'm not totally sure of the original format of the storybuilding process, but I do know they are now available as ebooks.

[0] - http://en.wikipedia.org/wiki/The_Mongoliad (Wikipedia because I think it better explains the nature of the project than the homepage)

I daydream about this periodically, but I can't quite picture how the community keeps the game rules balanced enough for there to be a game

Second Life is like this. It works well, but the tool set could always be more improved and focused on MMO.

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