Forcing players to have to do something over and over is normally not much fun in the end. It isn't bad if you add in progression or flagging for certain parts of your server, but to do it for every zone would make it get boring really fast. People like the illusion of freedom and requiring flagging like this would make it seem even more linear than it already is.
Not that it isn't an interesting idea, but I don't think you could base an entire server off of it. If anything, you could maybe add a quest series to your server that has something similar to this for people to work on on the side. As long as the whole server doesn't require it to play, it could be fun.
I use some flagging and quests to sorta force progression like this, but I try to do it in a variety of ways, and not for every zone. I think variety is the key here.
Then again, it is all in how you implement it. Something different always has possibilities, but you would have to do some really cool stuff to make a server run entirely on individual progression and have it be fun. Just my opinion on it.
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