umm, by that same reasoning you can say every multiplayer game is about showing off yourself...
I think you're focusing on the passive aspect of the MMO, where you come to a city and you see some guy wearing that shiny armor you don't have. In those terms it's showing off, but on the other hand MMOs are really a separate niche of their own. It's not trying to incorporate a social networking medium, since the medium is the game itself, it gives you the possibility for COOP and PVP with other players (just like many other multiplayers do) the only thing with MMO is that you don't have to go through game menu's to chose what game mode you want. It's a vast world and you chose how you experience it. You can play it like skyrim, and not care about all those other people running around, or you can ask random people to help you and maybe befriend them and experience the game further with them. The beauty of MMOs is the fact that developer creates a world concept where it gets populated by real players instead of npcs (yes, there's still npcs in mmos, but they are predominantly utility roles to serve the players) and in this world you get to play and experience it the way you, the player, wish it to be. It's an allusion to escapist paradise like skyrim, only with multiplayer aspect added to it. Basically, think if you had skyrim, only instead of stupid AI companions you would be able to ask a human being if they'd be willing to help you out with a quest or something.
and even if we go with your oversimplification of things, what is wrong with incorporating social networking into a fantasy setting? obviously all the people who came to play this game like the fantasy setting, being able to share your experiences with friends and random strangers is such a wrong thing?