Richard's recollection is flawed on this (he wasn't close enough to the tech to know why it failed).
Reason #1: the closed loop fell victim to hoarding, particularly because the advancement system encouraged the production of goods with no value, as explicated in great detail in Zach Booth Simpson's detailed paper on "The In-Game Economics of Ultima Online."
Slides: https://studylib.net/doc/9778818/the-in-game-economics-of-ul...
Paper: https://web.archive.org/web/20090207141813/https://www.mine-...
Reason #2: the cost of pathfinding for the searches was too great. The Sims later solved this by having the agents in a very similar system use simple hillclimbing, with resources broadcast into a map.
I never really got to try Ultima Online during its heyday (I was averse to MMOs and saw them as a step backwards from the narrative qualities of single-player games.)
Re: the ecology, other commenters here and on YouTube have also noted that it was too easy to do things what you shouldn't be able to do, like chasing down rabbits and deer with a sword. :)
Thanks and looking forward to your next game!
It's a very compelling story, but that wasn't actually the case. The real reason was the flawed design. People just had to kill everything for the materials because of the way equipment was implemented.
"The problem is obvious. The animals were too easy to kill. Imagine trying to chase down a real rabbit or deer with a sword. You will never catch either one and if by some chance you corner them the deer would actually stand a chance of beating you."
Not really, in my experience. In MUDs with unrestricted player killing, in-game policing did very little to stop it (unless you count intervention from immortals/wizards, I.e. admins)
UO's original designer, Raph Koster, recently announced a new MMO project where he intends to revisit many of those old simulationist ideas.
Ultima Online tried to have such an ecology, but the players didn't react to it as described despite the game designers giving players minimal rewards for killing herbivores so that they would focus on killing the carnivores. Instead the players indiscriminately killed both the carnivores and the herbivores, because the players were human. The ecology was removed.
https://youtu.be/KFNxJVTJleE