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Does an MMO need a story?
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I think you need some story. I don't think it always has to be good, though. Look at WoW, it has awful storytelling. Quests are mostly just fetch quests where you kill 8 of X and 5 of Y. Few people read the quest dialogue, but its still there. There is some overarching story line, but its mostly conveluded and designed more for an excuse for you to continue leveling.
Now look at MMOs that did not have a story like Shadowbane. That was probably the purest sandbox PvP game I've ever played. At level 4 you'd leave the newbie island (which was honestly really fun and social) and get dropped into the world. No guide, no quests, just you vs everyone else. There was no motiviation or goal, just go kill people. Those kind of games have super high burnout rates. There just is no structure to them or real content.
Early 2000s were filled with MMOs like that. Some games were able to pull it off like Ultima Online, but most failed after 2-3 years. Games like Shadowbane, Asheron's Call 2, Ryzom, etc. There just has to be some pre-defined goal your players are working towards otherwise it's just pointless.
That's basically how I feel. People like to say they want deep virtual worlds with lots of freedom but time and time again they mostly fail due to lack of direction for new players.
I think a lot of it has to do with risk reward management too. Like this isn't exclusive to the MMO genre, you see it elsewhere. You have two questions: why and what do I get?
The hardest fight in Final Fantasy 7 is the optional emerald boss. Virtually nobody fights him. Why fight him? Its not required and the loot can be gotten elsewhere without fighting a 1mil HP boss.
Skyrim. Why play anything other than stealth archer? You do more damage and don't risk your health. The reward is the same. You still get the loot.
D&D even if milestone. If I get experience from advancing the story only, then combat earns me very little. It unnecessarily puts me at risk.
If a game is sandbox, then why should I fight these optional bosses or put myself at risk? I stand to lose more than I gain. Management wise, it's better for me to do nothing which leads to a pretty boring game.