There are already enough RPG games. Games like Witcher, Elder Scrolls and countless MMOs already give you enough side quests, loot and skillpoints. Why would you want this game to offer you the same things so many other games already have?
Loot and Skillpoints doesn't define RPG.
Good RPG is where you assume a role of a character (often created by you, like here, but there are exceptions like Witcher) and play it out defining his/her character traits, choices etc. The world around you is build in a way that makes you feel like living in that world and being part of it, often helping to shape it too.
It's not classical strategy game where you're playing more of a state, rather than character. (Sure, you're called King, Emperor or whatever) but functionally you just play the state/country/nation whatever.
We want more immersion just because the fundamentals are there, but then they kinda don't work. There are people in the streets who walk around, who you can interact with - yet, when you try to interact with them, they all say the same and don't react to you in any meaningful way.
Now, there were people walking the streets in Total War games too, but the game was designed in such a way that you knew, they were just decorative people representing population on a strategic map - because it was STRATEGY game. And you didn't expect, nor want your general to approach them and have interaction. And the fact that you couldn't do it, didn't ruin the immersion for you.
The tavern. It has bartender who you can interact with - yet he has nothing to say.
Traits - some lords have honorable trait, some devious - yet they both act the same way in a war, raiding villages and robbing the caravans. That breaks immersion. What's the point for NPC to have traits if all it is for is how many points in numbers it gives you when you interact with him? What's the point if the devious lords acts exactly like honorable one?
That's what we are talking about, not the medieval life simulator.