Yeah I played with the idea of how to play the game way back when, and I was thinking that Legendaries would be un-catchable altogether. I mean it'd just be sad if you saw more then one Mewtwo running around. Battles would be real time and everyone could watch. Losing trainer battles would result in no penalties, your pokemon would remain at the same health they went in at, if not just being full in all PVP fights. And for the love of god have HUGE diversity on the pokemon running about, it'd be hard to make, but maybe even making it somewhat random on what's around, so getting a new type of pokemon being all the better. So it's kind of like the animes were early on, where they didn't have massive armies, but rather what they encountered. It would also make trading more necessary. Got yourself a Butterfree, but you would rather have a Krabby? Then trade with one who wants Butterfree or what not.
If they put the effort in it could be the most epic MMO ever.