When I was young I played a game like this called Modus Operandi by Simutronics and it was some of the most fun I'd ever had. Apparently there is a resurgence[1] of this type of gaming and a community behind it. I think there is still room for MUDs in the age of hyper-realistic, COD-style games. It just requires a different set of user experiences, much like how books are still engaging in spite of TV and movies.
[1]https://www.reddit.com/r/MUD/comments/4d2qid/anyone_remember...