I think Fallout is a good vehicle for an MMO although the game engine would have to be altered somewhat however, sadly, VATS would be the first thing to go for such a game. You can't have the game pause in a MMO for one person just so they can "take their shot" with VATS. A FO MMO would have to be a 1st person shooter, very much like CounterStrike etc.
It would work quite well I think, and various mods could be developed for the game similar to what WoW has done.
Of course to achieve a huge audience for such a game, a massive investment would have to be made, somewhere in the realms of $100 million as I recall reading. A number of server farms would have to be built [vaults
] and a number of [ahem] Overseers employed to administer the game online.
In the current economic climate where capital is difficult to raise now, I would think that such a project is quite unlikely to get going yet because the sales of FO3 have done very well, it would suggest that there is an audience out there who would sign up to play a FO MMO. I know I would!