LARPs - big and small, serial and one-shot - use the same two basic dynamics to drive the overall actions of the players. 1) They use simple logic progressions (I want A, B has A, B wants C for A, D has C...). 2) they use opportunism (Someone's fighting over there! Let's check it out!)
These two basic methods can be simulated fairly easily. The problem is that they exist solely to provide grist for the banter mill: a LARP is all about Role Playing, after all. Sometimes, that's person to person RP. Sometimes, that's person to environment RP. Either way, new situations allow you to have new RP, and that's what the logical progressions and opportunism fuel.
That's not something we know how to simulate. Sure, some of the RP is straight forward: "Give me the dongle or I'll keeeeeeeeeell you!" But the best is far more nuanced, funny, self-referential, and situational. RP isn't about running around mindlessly spouting catch-phrases as you pursue an agenda. RP is about exploring a character as the situation around you changes.
While the overall progression of a LARP can be simulated, it's really not a very interesting thing to do unless you're trying to balance your LARP. The good stuff is the moment-to-moment RP, which we haven't really figured out how to simulate yet.
A computer game that tries to make active NPCs is usually, essentially, trying to simulate a LARP. It's the wrong half of the equation to focus on, in my opinion.
What do you think?