If your going to build a FPS-like MMO, why not just build a true FPS MMO?
for the same reason traditional mmo's have the combat they have; systems cannot function with thousands of players and the complexity of modern shooters, IE physics engines and poly-based hitcoding. It's just too much computing for a server to handle.
Your theory falls apart in the face of the fact that there were shooter based client-server distributed games long before RPGs became the dominant MMO genre.
Air Warrior, Aces High, Fighter Ace, Multiplayer BattleTech, and CyberStrike (among others) all had physics engines and per-polygon hit detection. I played Air Warrior on an Amiga, in 1987, on a 2400 baud modem to GEnie. The processing power of the client and the server are not the issue. The bandwidth of the network connection is not the issue. The genre of the game is not the issue. The skill of the people crafting the game is what matters.