I don't actually think it's a bad idea. 8 person co-op can be fun, like in Diablo 2. I don't think there's any reason that can be said to as to why it wouldn't work. Just imagine boosting each other consatntly on the console or making the ultimate "PvP" chars. That would be so fun lol, or even just playing with the general idea that you might run into each other. The possibilities of such a mode are nearly limitless. I don't think it would require a lot of network code to make it work either.
As for what I would like to see in Skyrim? Completely radiant everything!
- Radiant NPC's
Like seen in the early oblivion gameplay videos. NPC's would be able to develop specific goals, and work towards them, based on their intrisic motivation value, that varies from person to person. NPC's no longer spawn out of nowhere, they either logically come outside the borders of Skyrim or are generated from inside the towns.
- Radiant stores
Similar to radiant AI, as these non-player characters travel the land, they can acquire a healthy amount of wares and sell items to NPC's according to their profession.
- Radiant economy, Dynamic Events, and Destructible Environments
Similar to the radiant stores and radiant AI, radiant economy allows towns to grow or shrink depending on the amount of business they receive, based on the actions of the player and the NPC's. If you end a Dragon threat in some town, that town might become bustling, and some other town might suffer business instead. If you don't help that town, that town might become eventually abandoned and destroyed in a Dragon attack. Other than that, towns with a weak economy would be particularly vulnerable to Dragon or Bandit attacks, and furthermore there would be a far greater chance that the bandits would target them. Sometimes, a bandit lord might kill everyone in town and make it a town of his, and strenghten it's fortifications, or, depending on his personality, might just retreat back to his lair instead, with all of the wares.
- Radiant factions
Radiant factions would be the next step in an attempt to make the world more interesting and realistic. Npc's can form factions at will, in addition to the existing ones. A bandit lord might make pact with another bandit lord, and if player has not progressed in the mainquest yet, a warring town in the civil war might decide to attack another imperial-infested town at random. Meanwhile, a group of peaceful orcs might just decide to group up and build a mine shaft for themselves, Khajiit might flee from the violence and temporarily set them around the borders of Skyrim, etc.
- Radiant towns & Constructible environments
As NPC's travel around the map looking for something to do, some NPC's might decide to settle down and become a farmer, innkeeper, blacksmith, or something of the sort. As these NPC's find a suitable spot for land, they will begin to accumulate and might sooner or later form large towns. Over time, they can become large, bustling cities, and the players actions can directly help shape the future of these towns as well.
- Removal of random events
With the addition of fully randomized AI and economy, the occasional vampire/etc attacks at certain locations would stop, in favour of completely dynamic ones. Battles between bandit lords should now happen commonly around Skyrim, as well as vampires dragging innocent townspeople into their lairs.