"Why anyone is wasting time on whether or not this is an MMO is beyond me."
How Flagship labels the game can affect how people perceive and approach it. It's like deciding whether to call an El Camino a car or truck. The label can affect how the potential buyer imagines its possible uses and compares its features against other vehicles. Should it have as much towing capacity as a truck? Should it have a sportscar's acceleration? What sort of vehicle should its gas mileage be compared to? A label of "car" or "truck" answers these questions for the buyer. Labels underline your selling points.
Flagship's decision to call Hellgate an MMO might represent an attempt to appeal to all the MMO veterans who have been anxiously waiting for the next good game of the genre. Hellgate might even help build interest in the genre, since many of folks playing it have probably never before played an MMO (the sort of games we usually associate with the label).
Originally, I didn't think Hellgate qualifies as an MMO, but I'm starting to come around. You'll never witness another player adventuring who is not in your group, for example. The only time you see other players outside your group is in the hubs (in which I've never seen more than 20 people or so). But you can communicate with people in separate instances across the server, and that limited interaction in the hubs is meaningful.
Anyway, in summary, the MMO label will have consequences. What those consequences turn out to be will be interesting, to the extent that we can discern them.