There are really two discussions taking place here: One involving population and another involving AI.
The discussions revolving around population seem to take umbrage at the idea of a living landscape, presumably because in the real world you rarely come across large fields of animals just meandering about. Much of the real world feels largely empty, so why should a game world feel so empty, right?
Well, in the real world I also have to relieve my bladder a few times a day, require a specific amount of sleep, and I have to pay taxes to the local (and distant) governments. I age. I eventually die. When I die, I do not get the option to revive and start fresh. The point is that gameplay should win out over realism when all other things are equal (and really, they rarely are at that).
Create a game world with large expanses of nothing and players feel that the world is empty and "dead". Forums fill with complaints about this. Other players simply stop logging in or paying monthly subcriptions. Though a certain percentage of players will always prefer more of a simulation feel, the vast majority of players will want a game that feels vibrant and overcrowded.
Even away from the look and feel arguments, there is something to be said about providing enough targets to go around, too. After all, if a quest requires killing 10 rats, there better be enough rats around for multiple players to get their fill of rodents or you'll create friction and eventually customer service calls/petitions (which costs $$$). If the design calls for creating friction between players, that's a horse of a completely different color, however.
The second discussion is a completely different one from the first (though not mutually exclusive to the first). Players tend to want better AI all the time. Frankly, so do developers. Good AI is one of the holy grails of gaming. Most people never really notice good AI, but they sure do notice bad AI.
You can get around some AI issues through pre-scripted encounters. A significant number of players seem to really enjoy scripted encounters (I do). Oddly enough, this may be one of those "careful what you wish for" scenarios, because Everquest II tried this with the Shadow Odyssey expansion and it resulted in huge forum threads complaining about how difficult the new scripted dungeons were. Even if the scripts were explained to these players, they just couldn't figure them out - or maybe they didn't want to have to. Some players simply want to log in with a couple of friends here and there and just bash away on monsters for a while.
I'd love to see more realistic AI in Rift. I think there's a lot to go on there. However, I don't think ALL encounters should have top end AI or scripting. There has to be a balance there unless Trion is going for a small hardcore niche audience only with Rift (which I don't think is the case at all).
I think it's perfectly appropriate to have large herds of dumb cows roaming more open, accessible areas that typical players can just bash away at, while at the same time utilizing more advancing detection/social AI for dungeons/castles/outposts/villages/etc.