1) Because we wanted to make a RPG, not a MMORPG! Those are two very different genres which need totally different approaches when it comes to both design and execution. In RPGs you can develop a more interesting storyline where the world around you changes, which is a lot harder in MMORPGs where the world needs to be in the same state for all players. There are already a ton of generic MMORPGs out there as well, while the action RPG genre gets very little love these days.
2) Even if we wanted to make a MMORPG, it's a way bigger scope for a small group of 3 people. This is our first project together, and it's already a ton of work for such a small team. A MMORPG needs way, WAY more - it simply wouldn't be viable at this point.