alt Hacker NewsThat sounds very different than my memory of MUDs. The ones I remember were much more a text-based version of "World of Warcraft" or other similar MMOs where you navigate through a world, complete quests, etc. You could chat with other players but it was more about teaming up for quests than a creative writing/roleplaying exercise.
Not to say that what you're describing didn't exist, but I don't think it was defining feature of all MUDs.
There was a distinct split between people there for the grind and people there for the RP. I was there for the RP and I was mostly on MUCKs, MUSHes, and the occasional MOOs (multi-user chat kingdoms, multi-user shared hallucinations, and mud (object-oriented) ). They all had a combat system lurking somewhere in their code but those routines rarely got used.