The tree is a persistent online game. The squirrels are players. The branches are courses of action that players or groups of players can take. Most games provide these branches, but they don't bend. You pick quests, carry them out in largely the same way that the last person did, and nothing changes as a result. You climb up the steel branch, get the acorn, then climb back down to the welded join to take the next branch.
A better system would involve a degree of flexibility. A player should have an impact on the game that influences their future choices and which is noticeable to the other players. There wouldn't be so much at early levels; this is the 'trunk' and the largest branches, which barely budge under your weight, and which are designed to be rigid introductions to the game, with little scope for error. Later on you get to have a real influence on the world, that gives better opportunities to make a difference. But when you withdraw from that area of the gameplay, it slowly bends back into place, giving other players the same opportunities that you had.
So, how do we build this flexibility in place, while keeping the 'springiness' that makes a branch snap back when a player leaves it? Perhaps players gradually accumulate more and more skills that allow them to alter the game world, but none of those alterations would be permanent - houses crumble, forests regrow, goblins migrate to different lairs. A better understanding of feedback systems might help here, allowing us to create sub-environments that can absorb a certain degree of player action before springing back in response. Better exploitation of the middle ground between 'repetitive grunt work' and 'high fantasy quests' when creating tasks for players might be lucrative; defending outposts or making diplomatic representations are the sort of activities that can both make a difference and yet legitimately be carried out by player after player without breaking the fiction. A Tale In The Desert shows one possible direction with many of the activities being social in nature, the fact that many players are doing the same quest becoming a benefit rather than a fiction-breaking distraction.
I'm not sure we have all the answers just yet, but I am sure that we can do better than the relatively rigid structures that we currently have in most such games.