As mentioned, I'm playing catch-up. As such, I just discovered a post called "Beauty is Pixel Deep" on Terra Nova. It's a little old, but it shows something interesting.
It shows how your assumptions can make you miss things which are obvious on the field.
Reading the relatively short essay, it is clear that Nick Yee is assuming "beautiful" is the same as "attractive". Which really isn't the case for two reasons. First, beauty is relative. Second, beauty is only one facet of attractiveness.
Now, what Yee is asking is if you can manufacture a social framework with the "memetic" choices you allow the player to use. Obviously, I believe the answer is "yes". Half my posts are on the subject. But in order to understand the complexity of the issue, you have to understand the complexity of what people consider "attractive". Interestingly, it can be extrapolated on for use in virtually any situation.
Being "attractive" doesn't necessarily mean being "sexy", although a huge number of the pubescent players on MMOGs will tend to be guided mostly by the various bits fastened to their crotches. For example, Gandhi was attractive. People followed him, loved him, starved for him, died for him. But Gandhi wasn't sexy.
On the other hand, being sexy usually makes you attractive. It's just not a two way street: you can be attractive without being sexy. In fact, you can be pretty ugly and still be attractive.
Because attractiveness is relative.
Attractiveness is based around the environment of the judge. Or, more classically, "Beauty is in the eye of the beholder".
So, Horde is uglier than Alliance. But the game actively pits the two sides against each other, often very successfully. Moreover, people who choose the Horde are fully aware - and usually eager - to join into the darker world those monstrocities inhabit.
Then the pressures hit those who hardcore play the horde:
The Horde people help you, the Alliance people hinder you.
The Horde is exalted, the Alliance insulted.
The disturbing Horde women are available, the pretty Alliance people aren't.
After a few weeks of these pressures building, people who play the Horde can undergo a severe aesthetic shift. When asked, they'll probably still say that Alliance women are beautiful, Horde women are disturbing. But they'll be flirting with Horde women, thinking about Horde women, and trying to cyber with Horde women.
A common alternative, for people who don't make quite such a severe shift, is to think like Conan. While playing the game, they idolize the dark culture of the Horde, revelling in the "might is right" ideal. These people are doing the same thing, just on a slightly less disturbing level.
Obviously, this takes several important assumptions. For example, it only applies to hardcore horde: people who play horde for a significant number of hours each week, and don't play Alliance. It also applies only to people who play only WoW - if you go off and play City of Heroes, the isolation is broken and your preferences are recalibrated.
Similarly, it assumes that the people who chose Horde aren't coming in with a preference for disturbing physical shapes. I'm sure that some Horde players come in with pre-existing fetishes.
This growing extremism in isolation is found in every situation. From cults to SecondLife, people will persue goals they can see, and the importance of goals outside their worldview diminish with every passing moment. Isolation, often self-enforced through the forming of private groups, keeps these people from recalibrating to an accepted norm. So they get weirder and weirder.
This isn't necessarily bad. In fact, you can use this to do some awfully interesting things. Some of my live games have been based around the concept. But you need to understand that it does happen. Preferences are not static. People will change shape to fit whatever container you provide them with.
Really, most games are about isolation: about the wall between what the player experiences and what the "real" world is. Games are about isolating particular components of culture or reality and letting the player live them without overt interference from the normal world.
Managing your walls - governing the isolation of your players - is a skill which will allow you to create a strong and vital community of enthusiasts. :)