There'll always be sandbox games- but they'll always be what they've always been- an extreme niche.
Most people don't find putting dozens of hours of work into building something, only to log for the night and find it's been scrapped while you were sleeping- and with mmos that's what happens. Especially since the average player is casual these days and may never see the fruit of their labour.
It'll still be there as a niche though.
You're talking about a hardcore sandbox, and you're right, those will never ever work with the masses. Which is what I am afraid the repopulation is going to end up being if you want open world housing/cities.
It'll take a combination of both themepark, and sandbox to work in the future.
Few here want to hear this, but what SWG was doing in the last 2 years of the game was a very well made hybrid that had more things to do than any game before, or since. If you got tired of doing one thing, there were hundreds of other things to choose from to do. I never ran out of things to do. One day I might craft, the next I might do theme park stuff, then next I might gather materials to clone a combat pet, or do space, or heroics, or farm deathwatch bunker, do GCW stuff (which I loved dearly), or even scavenge for krayt pearls. I always had something to do that was interesting to me on any given day.
It might be strange to some, but I once spent 2 weeks doing nothing but going from city to city, and exploring as many open player houses as I could. There were too many amazing decoration jobs to list, and some of the player shops had decorations that blew me away. I never came close to seeing them all though.