I think the model of that Castle Doctrine game, where you have to validate player creations by running through it basically naked, could be twisted to test player-built dungeons. Basically, your dungeon has a public testing phase and if the playerbase gets too much wealth and suffers too few defeats, the dungeon is kicked back at you for revamping. Only once the dungeon tests as balanced will it be added to the world (and at that point unchangeable by the creator) and people can actually play it for real.
Throw in a voting system for people to choose the better models for things like houses etc. and you could do the same for player housing, equipment, spells, pets, monsters, etc.
I don't mind the game being slowly improved by the playerbase. I think all games could use some improvement.
Having balanced rewards is one of the big problems I've been trying to wrestle with in terms of having meaningful player-built dungeons/raids. I think if I were involved in any such game, I'd try to build the gear system around a crafted kind of interface, and dungeon drops rewards armor
components which you plug together to create the armor you want to use. These components would more or less be available elsewhere, although the exact balance of stats that a component offers might vary compared to similar item types. For example, the hide of a fire dragon might offer fire resistance and strength, but the hide of a hellhound would offer fire resistance and dexterity, (and meanwhile there are fire wyrms and hell-pups which also drop hides with the equivalent, but weaker, balance of stats). And then you throw on miscellaneous items to boost other stats: basic steel plating or rivets to offer physical resistance, or socket gem or gem-type items (like eyes) for other stats. If you're familiar, the system would be somewhat similar to the honorific/Mystic Orb system that BrotherLaz uses in his MedianXL D2 mod.
In this way, you can have a large variety of dungeons with a large variety of enemies, which all offer different experiences and are farmable, but don't offer identical relics that players collect until they have them then stop running them. I would probably also include a very generous gear swapping system and require meeting very high gear checks, which should incentivise people to actually go to all these dungeons so they collect the components needed for the gear. The need for specific resistances is one example, but others could include sources of reflect, immunity to a or multiple status effects, sheer health, and the usual DPS races (although these would not be balanced in terms of an enrage timer, but rather more of an "alert" timer - kill the thing before the rest of the dungeon's inhabitants interfere with the fight).
(Also, a possible side benefit: going back to open world dungeons rather than instances, since if some dungeon is on farm because it drops the "best" component, there is another dungeon somewhere else that also drops that component, or something similar enough that you can boost what's missing with a third component from some other place. Side negative: there will probably be a lot of "mathing" going on about what's actually the best components to use and how to balance stats.)
The alternative would be a token/point reward system, which would let devs control directly dungeon rewards, but I think simpler and less enticing.
But there are two major points to keep in mind. I would still want a very dev-led content scheme. The player-made stuff is there to add variety, but you'll still need an actual team to keep some semblance of a focused lore content going on. It doesn't necessarily have to make sense in a broader context, but certainly consistent within its own narrative - for example, most of EQ1 expansions were pretty disconnected from each other (at least until GoD/OoW, and later expansions which fleshed out the world rather than creating new ones out of whole cloth) - but each expansion had its own focused story line. These dev dungeons could still reward relics, but as far as artifacts as concerned I would only allow one per server; they could be copied (whether at 100% effectiveness or not, or partially substituted with other components), but only one true artifacts.
The second point is that devs would have to keep veto powers over anything that players create and vote for. The players may vote for a dungeon that rewards tons of high quality components, that looks absurdly hard on its face, but can be cheesed because you got some buff for killing 5 rabbits elsewhere within a 10 hour period. Devs would, of course, have the final say on fixing "exploits" like that. (Player content that's actually difficult purely for the purpose of being difficult could probably be left alone, though it is unlikely that players as a whole will vote for that kind of stuff.)
/unsolicitedunskilledbilespew