Uh? Why not. The thing with procedural generation is that, if you have the same procedure and same seed number, it generates the same things on the server and the client. It's done all the time with Minecraft, people see a nice vista/location/village/whatever, post their world ID and the loc, and everyone can go there on their own PC and see the stuff. And Minecraft generates the world in 16x16 chunks whenever you get close - and yet, the same mountain is on everyone's PC, regardless which direction they came from.
But you have to have the world fully generated by the procedural system. None of that "the world is procedurally generated, then our level design staff goes in and puts the finishing touches". And yes, that means sometimes you get weird stuff. Which is fine; it creates some legendary talk about the most funny vista one can find. In fact, those little imperfections give character to the world.
(alternatively, you can have a GW1-type system, where any zone you've never encountered is streamed to your client during the "Loading, please wait" phase, and stored locally on the cache)
You can't generate mid game for a flat game because things have to tie together and you need the entire map fleshed out. EVE is fleshed out (except wormholes) but the "junk" and asteroids etc in each area will randomly generate. That is ok because if it randomly generates in the middle of space there is nothing it will hurt.
For a flat game with an actual world the client needs a zone file of some sort with current technology. HUGE issues with z-axis exploits if you randomly generate. If you want to see an example of a game that tried random generation in an already established world look into Star Wars Galaxies. The stacking of random things and the all around bugginess of their random generation might have been because of poor coding or previous limitations but that was still done on a fleshed out planet and you were just randomly generating entities in it. We want a world that isn't small and boring and cookie cutter though.
You could make it work but you need to figure out how you are going to handle blooming file sizes and z-axis I think first of all.
Like I said it would be interesting to get a 10 man team together to just code that portion of an "MMO" and see how it would flesh out. Just the ability to generate an entire land of HUGE proportions and do a flyover and see how well it fleshed itself out. You get that working you can pretty much just toss that into any engine and let the mechanics work with it. You need to flesh the game around the open world eventually.
Right now the way we MMO isn't quite conducive for your fantasy MMO.
Here are some of the forseeable issues that may arise.
1.) Z-axis bugs/sploits, whatever.
2.) Long distance without any travel points for quickly moving. Imagine a world the size of EVE you traveled on via horse ....
3.) File allocation and chunking on server and client.
4.) World "too large" it feels dead.
5.) PVE or PVP or both, you need to figure out how you are going to deal with that especially super long distances.
6.) How are we going to do resources, are we going to do mines, how are we going to randomly generate that.
7.) Do we do one server for the entire game? If so do we do a mix between randomly generated and then fixed up? That could work good.
None of these are insurmountable alone and probably not combined but I just don't think we are anywhere near this for umm 5-10 years I think.