Dungeons and raids sounds too much like WoW
But I like games where you have areas or instances where you can go in and "have fun", do quests etc. That subway in Anarchy Online was great, I probably spent my first 25 levels in that place alone.
But I agree on the fact that there should be party caps, so that you cannot go as a 100 man gang and just finish the instance in 3 minutes. But, if you can be in a party with 20 people, then all should be able to attend the instance IMO, because it just plain svcks to get left behind.
Group quests are what makes an MMO, it's what ruined Fallen Earth (personally) for me, because I never had any friends to play with because you could just do it all by yourself.