Hop, a reader, wrote me to tell me about the GM run event that the original Everquest had when the Kunark expansion came out. GM controlled iksars invaded the Desert of Ro, and evil gods walked the land. I'm afraid I missed that one, I joined EQ just after Kunark came out. I don't remember having seen any GM run events in any major MMORPG. I was at the opening of the gates of Ahn'Qiraj, but that event was scripted.
When Kunark was released, Everquest still had a relatively small number of servers. If World of Warcraft wanted to run an event with characters controlled by GMs, it would need to hire hundreds of people to do the event on their hundreds of servers. You would need to do the event on all servers simultaneously, otherwise people would just create new characters on the event servers, something that happened in the Ahn'Qiraj event.
Ahn'Qiraj also demonstrated another problem with events in general: People gather at the place where the event takes place, causing lag. The opening of the gates on my server was a horrible lag fest, not very enjoyable, even if it was cool. Game companies tend to try to avoid large gathering of players. There have been reports in several games where GMs broke up protest marches, not because they couldn't stand the protest, but because the gathering of people brought the server down.
Thus I have problems imagining a GM run event in a modern, big MMORPG. But I wonder whether something like a "luxury" MMORPG or "premium servers" with GM run events would be possible. Would you pay lets say $50 a month for playing on a server which had regular GM events?