My belief is that a location that encourages exploration doesn't work well as a dungeon, or at least not as we think of dungeons these days.

My go to example whenever this conversation appears is Black Rock Depths from Vanilla World of Warcraft. BRD was probably my favorite location in the game because it created the feeling of a living city that had all these different secrets to uncover and challenges to overcome, but as a dungeon it was horrible. The concept of BRD is something that I hope FFXIV takes a shot at, but I don't believe that doing it as a dungeon would be the best way to do it.