Is Hellgate an MMO or not asks exactly that question. I definitely agree with the sentiment that a new term is required for games that rely heavily on instancing, but I think we could do better than "Instanced Multiplayer Game".
In my opinion, they're simply not the same as other non instanced games. I think that instancing has it's place, and that games like WoW and to some extent SWG got it right with their use of instancing (I liked it more in SWG per se, because there were instanced as well as non instanced dungeons).
There's just something about a heavily instanced game which breaks the "feel" of a MMO. Maybe it's because some of the things I've enjoyed most about MMOs become diluted when you throw instancing into the mix.
Either way, new term = good idea.
Link: Hellgate: London subscriptions are now live
Link: Is Hellgate an MMO or not?