It started with a seemingly random comment one evening, while playing World of Warcraft: "I miss Katherine." A couple of us joined in for a short bit of reminiscing, rattling off names of people we missed - Aly, Sabine, Meret. This doesn't sound too unusual - people come and go in games all the time. But these people weren't real. Those were the names of characters my friends and I used to play. We used to be roleplayers.
A long while ago, I left the "roleplaying scene" in hopes of finding roleplaying elsewhere. I could've gone anywhere, but I chose WoW for my outlet. I searched for and found a roleplaying guild. The people behind the characters were more pleasant and welcoming than the community I had left; we held a couple events, and we even had occasional guild meetings in a tavern. Enthusiastic at the potential, I convinced my friends from other games to come join me.
Shortly after we flocked to this new guild, we ran into a problem: It fell apart. As more of us reached level 60, the roleplaying became less interesting than the new opportunities WoW's endgame content opened up. Roleplaying tends to vanish in worlds with an intense endgame, because there's just too may other ways to fill the time.
With content designed mostly to retain players who have maxed out characters, character development also takes a backseat, because your impact on the world is limited. Games like EverQuest (and every MMOG thereafter) drove this point home. It's a matter of necessity: Content can't be generated fast enough for every single guild to have a unique dragon to slay. So everyone gets the same experience. Character development, the cornerstone of roleplaying, grinds to a standstill and becomes a laundry list of epic drops. What draws a lot of people to roleplaying is the opportunity to be unique in a strange land, but no matter how many options you get at the outset, at the end of the day we all look the same.
Still, there are roleplaying servers, but in even these places, many players complain that the rules are poorly enforced, if at all. You have to ask people, even on a roleplaying server, if they roleplay. Often you will find people are there "because there's less twinks running around named l33tkilla."
Games also try to keep the RP dream alive by employing event staff, but it pretty quickly becomes obvious that the kind of events players really want (personal and world-changing) won't work. The events needed to justify the cost of production are too labor-intensive to be worth a developer's while. Even back in the days when some of us were volunteers, we knew deep down that our elegant schemes and plots only touched a small percentage of the player base.