You people haven't watched enough westerns.
Cowboys tended cattle and drank alot. They didn't 'ride into town and shoot up all the black-hat-wearing tyrants...'
That is what we call a movie...
(And you should watch some Eastwood films, X-man. The Unforgiven, or The Good, The Bad, etc.)
Anyway, I like the idea. The problem I foresee, however, is that NPCs would never shut up and/or their problems would never be solved no matter how many people do their quest. It could get weird having NPCs shouting about needing to return a book every 30 seconds... (or every time a new player comes within earshot). And what about if the NPC has multiple quests for you to perform?