The other "impractical" game idea i've always wanted is simply an RPG with an AI gamesmaster.
It could be singleplayer, multiplayer, or even a MMO (and it'd be the first MMO i'd want to try).
The developers wouldn't be worrying about levels, or loot, or bosses or stats. Essentially everything would be generated on the fly by the AI gamesmaster, and it'd react to whatever actions the players decided to do. This would finally make a CRPG that wasn't mostly combat based, and which was more about the adventuring of P&P rpgs. It's goal wouldn't be to beat the players, just to create interesting scenarios for them, and allow them to use their imagination and creativity to solve them.
I guess it'd be a little similar to that Sleep is Death game, but with the AI having access to a whole range of materials, and being able to select and use them much faster than a person could.

I'd make Dungeon Keeper 4 ;-)
And rename it: Build a Dungeon 1

An MMO action game set in an urban environment with real time 1st/3rd person combat mechanics and RPG Elements™ (to those of your familiar, with the permission of the TRL crew of course). Essentially GTA with more polished shooting mechanics in a persistent online world like WoW but action oriented instead of turn based combat. And since we're fantasizing, all this done with the CryiENGINE in ultra photo realistic style and advanced real time physics with completely destructible environment.
Honestly though, this concept is reasonably feasible. I would say within the next decade, the tech should be more than able to handle this sort of game.