While phasing was an interesting addition to WoW, I don't feel it fits very well in the scope of UO. This is mainly because there isn't anything that is currently done in UO that would require any changes to an area. Now if we did something like create varying difficulties like they did in Diablo, phasing could be used to represent each of the areas based on the difficulty. Creating a world with instanced dungeons could be accomplished with the use of VMWare, VSphere, or something similar. Virtual servers can be created with VMWare, which could each represent an instance version of the dungeons. Each virtual server could be relatively small, just enough to house the map and mobiles. Virtualization is a fairly new type of technology that helps to minimize hardware costs for industries that need alot of space while minimizing the risks of hardware failure.
While WoW has some great technology implemented and it is a leader in the MMO world, it is not perfect by any means. I have played that game for 7 years, and in that time I've done everything outside of Cataclysm raiding. I did not come back to UO to make it more like WoW, I came back here to get away from it. Due to WoW's popularity, there are many players, both young and old. Overall, the community is mostly composed of a younger demographic, ranging from ages 12-17. There are players of all ages that play, but the community is immature in comparison to other MMOs. While FFXI is not a widely popular game, the community that does exist are much more mature. The restriction placed by having fewer players requires more cooperation among those players. It doesn't take a rocket scientist to figure out that nobody wants to group or party with a petulant child.
The goal of this thread is not to emulate WoW, as they already have emulators for that purpose. However, adding in elements to improve the same world everyone has is the goal. I am pretty sure there is a free version of VMWare. If we could find a way to include a starting set of instanced dungeons and a tool to help each shard owner, regardless of experience, create their own instanced dungeons through a template, we could create a stream of shareable, player-made content that will expand the game.