I'm not here to promote other games so I won't use the name. But there is a game similar to Xsyon, and people are free to build as they please... you would be rather shocked of how very little grief and destroying of land goes on. I don't see 1000s of players running around, so if each person could have a very small deeded area, it wouldn't affect that much - basically, right now with the totem system, it's either join a tribe or go place your own totem. What if a player wishes not to leave a tribe? This is a sandbox, why have it so only areas with place totems can be lived on?
Why not agree with terraforming and respawning, it would be no different if a solo person placed a totem... it's just this case allows one be be part of a community/tribe, and still be able to do his thing. Totems aren't really limited, since each player has the option of placing their own, if they did not belong to a tribe correct?
Also how could it make the world ugly? With a small area to work with, not much could be done, if he chooses to dig a whole or raise a pilar of dirt, who cares, just walk around it

Who says a tribe can't form and their sole purpose is make the world ugly?