I think ElfQuest would work great as a first-person RPG, first person adventure, or small multi-player rpg/adventure where you created your own character. Something like, say, Oblivion. Some sort of central quest, but then plenty of other adventuring to wander off to do.
I don't think it would work so hot as an MMORPG, though. Not until MMORPG's evolve to include "RPG" again. For one thing, magic in elves is still supposed to be rare. And yet in an MMORPG everyone would want to have a lot of it. And like Nowth said...hack'n slash would be terrible in EQ. What do you do...have the ten twins of madcoil come back? Make winnie the villain again so you can fight her magic monsters? There's so little to fight. EQ isn't supposed to be about fighting anyways, but about love. How do you maintain that theme of love in a gaming market that seems to mostly care about e-achievement?
It would require, I think, a visionary.
Until then, there is Neverwinter Nights 2. Create the World of Two moons on a stand-alone server, write modules that fit that world, and only let people play halflings (for wolfriders/gobacks/sunfolk) or elves (for wavedancers or glider-types), or humans. Get someone to mod the halflings to have pointy ears. And voila! ElfQuest game! I bet someone did it already with NWN, now that I think about it. There was so much going on in that game.