They can argue that point all they like, it doesn't prove anything. The vast majority of MMO games use instances. The limitation on maximum players per instance is defined by the constitution of the game. They're still MMO games because you can meet every player, just not at once. And by arguing that a game isn't an MMO on the basis that the instance cap is under an arbitrary value would suggest virtually all MMO games aren't MMO games; it also suggests that the person arguing the point is claiming an MMO must allow all online players to coexist in the same space simultaneously. Even in wow, the only MMO that I'm aware of that has no instances, this isn't technically possible. The server would crash.
See, if we go down that route then one could, incorrectly, argue that ed is more an MMO because it's possible for every single player to see every other player in the game at one point in time, where in most other MMO games there are distinct servers so it's not possible to meet everyone unless you have a character in every server.
These arguments are pointless and serve no purpose whatsoever. It's irrelevant whether ed is an MMO. It's an online persistent game with one server and instances. The only thing that matters is whether the game is fun.
This.
No need for butthurt. Find your friends and play with them... it's really not that hard.