There's a very good reason to use D20, or the older AD&D ruleset, and there's a good reason DikuMUD's became the most popular MUD type out there, being based on AD&D 2nd edition rules...
Yeah, you heard me. Say what you want about D&D rules being "simple" and "silly", but the system as a whole is consistent and well balanced. The problems usually come when people who don't actually UNDERSTAND the system start inflating the numbers to try and make things more cool, or more difficult.
If you're going to design a new ruleset, you have to design it as a whole ecosystem, encompasing everything from combat mechanics, to character advancement, to what 20 copper will buy you. Very few people even attempt that.
Just because a computer *CAN* crunch millions of numbers a second, doesn't mean it *SHOULD*. More complex != better.
Does that mean I think AD&D is better than anything else? Not really, but it certainly isn't laughable or stupid. It's extremely well tested. It's also a familiar and well known system. D20 started changing the system to try and streamline it, ironically, for computer games.
As for the system being mostly gear and levels, that says you don't actually understand how it works. Maybe D20 changes thing more than I think it did, but I can tell you that my old AD&D 2nd edition game was certainly not gear based. The most powerful weapon in the game did, I think, 3d8+4 damage. A big improvement over a newbie weapon that did 1d6, but not the kind of inflationary nonsense we see in MMO's where each swing does thousands.
In short, if you don't want the game to be about gear and levels, don't put the emphasis on gear and levels. You don't need to scrap the entire system because the implementation YOU saw emphasised those things.
Well of course what is stupid or silly is entirely subjective. I feel as if i am cursed with a vivid imagination, and most everything i see seems somewhat crude. You are right of course in many of your points, but only in so far as they apply to less gifted members of the game making community.
I dont want to come across as negatively impacting this community though: so i will offer more insight into combat. Something i hope will be embraced as a gift. You see, the d20 system imo abstracted things far far to much away from reality in the terms of its combat system. Something many would consider the core of the game. It's one step away from being a i (win/lose) roll when the combat is initiated. It is dumbed to far down for the purpose of ease of use in a tabletop setting. And because of this it misses out on many aspects which can lead to engaging, dynamic, and fun choices for the player.
1) endurance/fatigue is a very important part of real life combat. It actually takes less energy to block a hit than to make one. And as endurance falters, so do your physical capabilities. From the players perspective this opens up the realm of resource management, how best to expend their energy and yet still win.
2) Combat in real life isnt about blindly trading blows. there are several approaches which could be considered techniques;
a) defend and exploit- this is the typical standard of a seasoned fighter. Wait for your opening and then strike.
b) full defense- this is method most chosen for the tired,losing, or wounded fighter.
c) stick and move- this is the method best chosen when your opponent is much stronger and/or you are much quicker.
d) berserker- this is the most effective(yet risky) way to quickly dispatch unskilled or weaker opponents.
e) unprepared- for those unfamiliar with combat, this is the only option. It is also the default for those not expecting combat, to be constantly in a battle stance is unrealistic and offers up the chance for surprise attacks. Your defenses and offenses are poor.
f) defenseless- an immobile foe should be a near guaranteed hit for maximum damage.
Using such techniques grants more player interaction. A dynamic system in which the best option is dependent on the game state. With an element of risk for attempting to finish your foe off quickly.
3) Awareness is paramount to battle readiness. Being able to read where your allies and enemies are located is crucial. You cannot block or dodge an attack you dont see coming. And friendly hits happen in the chaos of battle. Any veteran can tell you to look in your opponents eyes to read what hes thinking. Know what your opponent will do allows for quicker responses and countermeasures.
Being surrounded by even weak foes, is just as dangerous as facing a singular strong foe. Numbers are power because of limited awareness and because you are limited to only so many blocks/dodges per a given time period.
Skills should be available to characters; to allow them to try and single out a member of a group, to position yourself so your enemies block each others view, and to avoid being surrounded.
4) One on one in an arena situation is much different from several forces fighting en masse. Organization skills help groups fight as one cohesive unit. Positions within the formation each carry with it their own unique subset of skills which grants benefits to the unit as a whole.
5) Knowledge/skill of anatomy allows for placing strikes where they do the most damage, or create unusual effects to hinder your target
6) armor changes the dynamic of battle considerably. Now, unless you have a pick, you have to strike in the gaps in the armor. And your defense skills can be tuned to more protect your reduced openings. But on the flip side, the mass you carry(including armor) slows your movement on every level; attack, defense, and mobility.
Drawbacks to wearing armor (through weight) gives an interesting choice to the player, rather than systems i have seen where you always want 'the best' armor possible offering the most stats.
7) Instead of auto attacks, i suggest a vast multitude of attack routine skills each with their own properties, diversified so that for any given situation there exists a countermeasure and a counter-counter etc. . General advantages in specific situations for some skills. In general conforming to an equation which balances defense, speed, power, and cost(fatigue). With each skill being trained to a level which determines its effectiveness. Perhaps with an in game skill editor so that players can make their own skills to be vetted by the admins before being accepted into the system.
consciousness is limited, at any given time a real person can only store 7 chunks of information in short term memory at a time. So i suggest a similar feature for characters, where they can only have 7 groups of skills(tightly related skills) available at a time in their consciousness. Although having access to virtually an unlimited number of learned skills in long term memory. This limit helps prevent a player from being able to do everything and thus trivializing content.
So in general, i suggest more interplay of various skills. Rather than a boring 'combat wall of text'. Situational skills gives rise to actual thought be invested by the player, rather than automated. I look to guildwars( the original) as a near ideal system where it is not the gear or level which determines success, but the players foresight and execution.