Excellent OP. Very insightful. Maybe i'm enjoying it all the more because it's in the same spirit of my lodestone blog from this morning. I'm just in an FFXI sorta mood lately.
If FFXIV becomes all about instanced raids i'm going to be utterly disappointed. I hate to say it because I dedicate a lot of time to the game, but if they intend to make a Final Fantasy WoW i'll quit. The wonderful thing about open world NMs and open world HNMs and open world everything, is that the result of open world is a living, breathing environment. It gives zones meaning and depth and purpose. They become somethings domain rather than just an obstacle to suffer on the way to an instance. Who would have fond (or at least entertaining) memories of Dragon's Aery if it was just the entrance to an instance where you fight Fafnir behind closed doors?
Notice you never hear any epic stories or fond memories told about the KS99 Wyrm but hear them by the hundreds about peoples wars against Nidhogg.
This might be getting a little off your original topic but I think it's still all within the same vein.
I read a lot of the posts on these forums and if Yoshi P is designing the game around them I worry about the future state and direction of this game. We'll see what 2.0 brings.