Most of the answer lies with Atari not being willing to throw more money at a game they thought was "complete" when they bought it - they didn't really understand the concept of MMOs (which are in heavy development all the time to keep people immersed). Most of Atari's games are one- or two-year hits at most, then they fade into memory as new games replace them.
So yeah, they didn't have the money to work on the things that would REALLY make this game immersive.