How are you gonna be compressing or simplifying the land when people can be anywhere on it at any time? This isn't a single-player game where you can neatly pack up locations that aren't near you, nor is it a space sim that is 99% featureless emptiness. If the idea is that you can literally go anywhere on the Earth, you're gonna need massive amounts of data that can be easily changed to accommodate user-made modifications such as buildings. There can be no invisible walls, there can be no "nodes" that have no direct access between them. Hell, even fast-travel could be considered "cheating" the spi
You mentioned Spore. Aside from the fact that it's a single-player game with noticeable load times when visiting worlds (which were procedurally generated anyway, so there aren't exactly "world files" that you can open up), those are much smaller than a real planet. I couldn't find any statistics on Spore planets, but there are statistics for Kerbin (from Kerbal Space Program). That massive planet that you can explore and is mostly empty? A tenth of the size of Earth. And again, single-player game.
Say your idea simplifying data is accurate. If the players were to spread out enough, how many would it take to bring the server to its knees? How much land could be simulated around each person? Minecraft does it in chunks, but those chunks are miniscule compared to the potential size of the world. Minecraft servers typically hold less than 100 players at any time.
The only saving grace I see at this time is that they're planning for it to be a browser-based game, which if nothing else means less strain on user hard drives.