I can't stand replies like this. Not because they are intrinsically wrong, but because they apologize for terrible gameplay when suggesting this. A video game should not require much imagination outside of character building or strategy (if the genre requires it) to be enjoyable. You should not have to play inside your head imagining things that you could be doing instead of what you can actually do inside of this virtual world. They don't mix and if you're spending so much time in your head, why are you bothering even playing a video game? The medium is supposed to supply you with all of the necessary tools in the first place.
On some level it's valid but on another level it misses the point. What you get out of something depends on what you put into it. The most profound and moving tv show/movie/play will be lost upon the person who isn't paying attention. If you don't respect the material, you're only cheating yourself.
On the other hand, you have broken play mechanics staring you in the face like making daggers to level smithing. You have one side saying the exploit even existing is a problem and the other side says "So don't do it and the game remains fun." They are irreconcilable viewpoints.
"The game is too easy with good weapons!"
"So just use your fists instead. And try not equipping armor."
That feels unsatisfying. I like the idea of feeling cocky and sliding the difficulty bar to "de sade" to really face some difficult opponents who fight well. But taking a deliberate handicap feels qualitatively different. Probably because you know that you're not facing better opponents but are facing the same old guys in a deliberately crippled fashion.
There has yet to be any kind of video game "RPG" that gets even remotely close to what can be done with PnP or just simple character acting. I've also never really felt the term "MMORPG" ever fit, even though I knew what to expect if a game was labeled as such.
You do get that stuff in the MMO's but it's not in-character RP but meta-game RP. You create your guild, you deal with the real life people behind the avatars in those games, you have psycho-drama. It won't be within the context of the game world. Gary the Dark Elf won't be [censored]ing about Sarah the Dwarf because of the history of discord between their two factions in-game. It'll be Gary the nerd complaining that Sarah the nerd took his l00t when they were monster-farming and she'll say she earned it. Or some kid can't make the raid time because he's trying to not flunk out this semester and now you're short-handed. Incredibly un-immersive. Everyone is continually aware that they're just playing a stupid game and wasting time that should probably be better-spent doing something else. And incidentally, that's how I justify single-player games. I can put 100 hours into Skyrim over a few months and there will be an end, I can eventually walk away and enjoy my life. You can't walk away from an MMO because there's no end. You can't abandon your buddies in your guild! But you're painfully aware you're playing a game, just like bad actors make you painfully aware you're watching a movie.