Re: dothack's "The World" as an RPG
The .hack// series was one of the first rpg franchises that I really fell in love with, and I actually really enjoyed a lot of its dimensions. I'd be at least interested in learning more about any game that got off the ground with it as a premise.
As far as the question of system, I'd seriously recommend against anything so crunchy as M&M, BESM, or Exalted for running this. While .hack// was obviously about a computer game, the mechanics of that game were downplayed in many of the stories (especially those outside the videogames) or abstracted away to tailor the experience to the more limited medium. I'd avoid any crunchy system that isn't going out of its way to emulate a video game because I think the experience would be overly bogged down in the "translation" of one to the other.
For my money, I'd run this in something rules-light and narrative focused. The Apocalypse world Engine could probably be easily hacked. Dungeon world wouldn't take much conversion as is. You could even go further and run it in something like FATE. Levels could be abstracted into a special aspect that is readily invoked or compelled to give people advantages/disadvantages in confrontations with players of higher/lower power. Tianxia had a system whereby "rank" gave certain advantages against characters of lower rank and a relative number of free invokes based on that disparity. Something like that could make "high level" characters feel suitably powerful while still making it possible break outside that strict hierarchy when it's appropriate for the story.
Anyway, that is all just my opinion, and you're certainly welcome to disagree and disregard any of it. I'll keep my eye on this, though.