I think that allowing player DMs is the only viable solution to the problem of generating content for a large number of players. If the developers create "generic quests" that are the same for every player, they lose the "epic feel" that is so appealing in single-player RPGs. On the other hand, if they make unique quests, they''ll only be able to entertain a very small percentage of the player base. Mass quests like invasions and wars are good for some people, but they have the same problem that generic quests have - no one is really a true hero (and it''s been proved over and over again that 99% of the players just don''t care about them). To make things worse, all of these solutions make the developers spend many hours of work just to entertain the players for a few minutes.

In my opinion, improvisation is just the ticket. If someone is creating content on the fly with a system similar to the one in NWN, it not only reduces the time it takes to design the quest substantially, but many DMs for pen-an-paper RPGs find this actually enjoyable, while designing a quest with a level editor and scripting is always considered "work" and takes lots of time. The only problems I see with this is balancing the rewards, and if you think about it it''s not that hard, specially considering all the benefits. And you can always have the DM status handed out to the players by the live development team, so that a player actually has to prove his/her worth as a DMs before being allowed to play that role.