When did I say there should be penalties for logging off? I merely said the world should continue to interact with the player. Believe me when I say I know the problem with games where you have to stay logged on to be successful. I was recently play-testing a multiplayer web-game that was in a sense a MMO. It turned out that wars were won by the aggressor 100% of the time, because first strike was always decisive.
Anyways, I think the "real" MMO that captures an immersive world perfectly without impacting those who are logged off is possible. It's just a matter of figuring out how to do it right.
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