I think this is a clear case of online play not really being accepted by the masses as of yet. At least in the sense that they are expected to pay a monthly fee. The Sims was a massive success with people who didn't typically play games, which is how it became the biggest selling game of all time. I think EA saw the growing MMO market and thought what would be a better franchise to strike a cord with mainstream America then The Sims. So, they green lighted the project, which got tons of attention from the mainstream and gaming press.
But, I think that the MMO market is still more of an area for the more hardcore gaming public. Not everyone wants to pay $15 a month to get their game fix on, and most of the MMORPG's are set in a fantasy, and to a lesser extent sci fi, environment, put them squarely in a demographic that is more inclinded to pay for play. Conversly, it is this demographic that also tends to shy away from a game like the The Sims, at least as a pay for play basis. Throw on top of that the perception that The Sims Online did come across as a graphical chat room, with most of it's content based on interacting to build contacts/friends in order to improve your status and skills. While other MMO games have far more to do. The game isn't just about interacting with people, although thats part of it as well. There are quests to give you something to do. Places to explore, items to collect, and a clearly defined path for your character to follow, making it easy to see how their stats, skills, and equipment have improved.
In the end, The Sims Online comes across as a way to bilk some more cash out of a franchise which is based upon players who aren't really into the online scene.
)