Originally Posted by Slide
brandon nailed it fairly much - also a single player game has the ability to tightly control events and what the game has to render compared to a MMO.
That right there is really the heart of the matter. When making an MMO (or really any multiplayer game, it's just magnified greatly in an MMO), everything has to be able to scale up to large numbers.
If you make a high-polygon model with really complex animations and it looks really amazing, that's fine. But what if you put 10 of them on the screen and suddenly nobody can actually run the game? In a single player game, where you have tighter control over the constraints, you can just say, "Well, that's alright, we'll just make sure there are never 10 of those on the screen at once."
With an MMO, all bets are off. That's not to say that you can't still have amazing graphics, just that you have to do a lot more work on things like scaling down level of detail in the appropriate situations so that the whole system doesn't grind to a halt when you've got 30 characters dancing on your screen.