Your concept would only work in a scenario wherein everyone piled in and actually worked for it (see: some MUDs, most of which don't work properly because people aren't that cooperative anyway)
Ooh! Now that's an excellent point. I've played plenty of MUDs and MUSHes, some roleplaying, some not. When you compare the sheer enjoyment I've gotten from the stories in these places, versus books/etc in the setting they came from...honestly the books win, by a long margin. Sure, you can get new stories from the games and it's cool to be personally involved as an author, but that's similar to writing fanfiction. Fanfiction with socialization. So a holodeck would seem like fanfiction without socialization.
Writing good stories is freakin' hard. That's one reason why authors--book authors, movie authors, game-script authors--actually get some respect in this world, often more respect than programmers. They arguably have a harder job. Of course it takes some imagination on the player's part (or reader's, etc) to get the full effect. And there are plenty who would argue that...okay, for example, that a lack of voice acting is ideal, because then you can imagine the voices the way you wanted them to sound. And that simple graphics are better because of the power of imagination. Okay, I can agree that that's good sometimes! But it's possible to take that too far. Let's take out the actual fighting sequences, for example, because you could imagine them being better. Let's take out the text descriptions of the town because you'd rather imagine them yourself. After a short trip down a moderately slippery slope, you end up with no game. At least you probably have a pretty cool story...so, write it down, and sell it so I can pick it up in a bookstore.
Let's extrapolate backwards. Go play some of the classic roleplaying challenges in Diablo 1, and imagine that there's a plot going on around you. Or, heck, go play FF1 and plot and scheme about some hidden subtext. There is an absolutely LEGENDARY LP for Animal Crossing, incredibly dark, that is a great example of applying imagination to a game...and it didn't even need (much) procedurally generated or emergent behavior. If you can do so much with a game that already has a story...well, why would you need to take that stuff out?
As for experiencing things in a game having more impact than reading about them, or having them result from your actions impacting you harder than having them pre-scripted...I flat-out disagree. I have VERY strong memories from even some pretty minor parts of very well-written RPGs. (Chrono Trigger, saving Lucca's mom's legs, then going back and visiting her in the present) Good writing can be absolutely amazing, even in comparison to real life, even in comparison to things you've experienced. There's a reason why storytelling has been such a huge part of human culture since the dawn of time. Hell, you could say that it's DEFINED human culture. It is a key part of human culture, all human culture, that stories which we did not experience are supposed to influence us very strongly.