Both methods contain faults, have stagnated at times and also made great strides forward at other intervals. Ultimately, I think new and exciting forms of progression are going to stem from unexpected places. Perhaps the world and story surrounding an MMO will fire off a spark, creating a burning pyre of new ideas. New customization and social interaction methods may lead to a meta-progression that happens both in and out of a game. Regardless of how it happens, I'll be ready to treat these future new ideas with reverence and fanfare.
Speaking of which, I wish MMOs would make a more notable spectacle of milestones. Leveling up was best in Final Fantasy XI, because you got to hear the victory music played at the end of every battle in the rest of the series. My first time through each instance in World of Warcraft will be a memory I cherish, because they were epic story moments both in-game and out -- having my friends playing along made it all the more worthwhile.
"-a developer can generate the kind of excitement that makes people give them a third chance."
As we move forward, I feel like more developers and publishers are probably getting this concept cemented in their heads. They have now realized that padding a game with grind only sours people on it, which is bad since the genre thrives on people liking it. By creating more meaningful content, thinking up fresher (yet not entirely alien) ways to fight and wrapping it all up in a world we haven't seen a hundred times before, a developer can generate the kind of excitement that makes people give them a third chance.
We all want to be heavily involved in our online games, regardless of our preference for one type of experience over another. Even a social player needs the same degree of involvement as a solo player, because both persons want to be entertained. And as ephemeral as the question "How involved am I in this MMO?" truly is, there's no denying that everyone craves that carnal connection that so very few games give us. I don't doubt this is the goal of every developer out there, yet I still find myself amazed whenever a major title is missing instantly, nearly or eventually involvement.