I voted for "No, MMOGs should reflect an ongoing storyline" for a few reasons.
1. I'm a roleplayer, and MMOs are not famed for their ability to reflect the story.
2. It increases immersion and allows them to do more with the game.
With point 1, a common problem with roleplaying is that the storylines, over time, get jumbled up and confused. What's the current point in the story? Which bad guys are dead? Do you do it based on level or the current patch? Questions like this are common and do lead to disagreements. If the developer every 2-3 expansions (such as Blizzard are doing with Cataclysm) drops a world change, it refreshes the game for veterans and can sort out a few lore/story inconsistencies.
As for point 2, I'm going to use Blizzard again and point to their phasing technique. The world will change in Cataclysm depending on what point you are at in the story, and I think that's a quick fix for certain areas. It gives you the sense of progression as you can 'feel' things changing over time. Bring back some materials, go off on another quest, and when you come back a tower has been built. That doesn't often happen in MMOs as you tend to have to wait for the next patch/expansion for the result to be seen. And with phasing, they can add more quests and different ones. So you might have to go kill 10 goblins and their leader, but when you go for the next one to get (say) some boar meat, the goblins are gone and you don't have to worry about them. It makes it look like they've truly gone.
Yeah, I've no problem with it.