I've never used an MMO. I would have been open to a KOTOR III MMO simply for the sake that it's a continuation of one of my favorite pieces of the Star Wars universe. I think that is lucasarts was aiming to peal to KOTOR fans, they would have at least provided a single-player option as well as online gameplay.
KOTOR was built upon being single-player, but it would make sense to try something to broaden the horizon. What better way is there than to make a masterpiece that expands on something that has proven its success?
They shouldn't just create something that is ONLY multiple player, but something that can also be multiplayer. That way, it could be adaptable to both single and multi-player game lovers. Is it really that difficult to use NPC's in place of people online?