Massively has a discussion post about garish mounts and whether players should be able to hide them or have an option to filter them to be more lore appropriate. Many MMORPGs do go all out with a huge variety of mounts, they along with companion pets are a popular thing to collect. Everquest 2, as mentioned in the article, has a pretty zany selection of mounts – including giant bunnies, big dragons, clouds and more. Although the crafting area in New Halas can be a bit choked with a bizarre zoo of rideable creatures, I do not count this as being particularly out of character in Norrath.
World of Warcraft has its fair share of out-there mounts as well and most of them I have no issue with. I’ve become less bothered by the steampunk elements in the game but when they first introduced a full-on motorcycle I was pretty annoyed for a time. Cartoonish Gnome-tinkered gyrocopters and the like are one thing, but an actual bike that looks like something rather closer to a real world, modern vehicle, that somehow felt like a step too far. Perhaps it wasn’t the design of the mount that annoyed me so much as the plethora of bunny-hopping motorcycles making constant revving noises in major cities that irked me? That’s something that isn’t mentioned in the article or discussion – the option to mute other players’ mounts…
Oversized mounts are another aspect to this issue in WoW, stacks of mammoths or dragons on top of bank NPCs, vendors or quest givers can be a problem if it’s possible to block others from clicking on said NPC. It’s also quite a pain to get city-based screenshots without some monster mount photo-bombing the frame. I’ve even seen rather oversized mounts in SWTOR, some of the speeders are large enough to cause busy areas of the Fleet to look like a pile-up of crashed vehicles.
At least one MMORPG takes its lore seriously enough to strictly restrict the available mounts, Lord of the Rings Online, where horses and the odd goat are all you can ride. I can’t think of any other game that is this restrictive but there may be others. I’m happy enough to ride around Middle Earth on one horse or another, I can’t imagine having drakes or wurms as mount options in this game.