I think it could probably be done with a point and click environment, but other than the models in the game and a few minor changes here and there, (and without extensive scripting like CoffeeGrunt said) each game made with it would feel and play pretty much the same. It would probably be fun for a little bit, but with a lack of variety, I think it would get stale.
Edit: Dungon Keeper was a wicked good game.
My green thumb grew the tree my Trojan War horse was crafted from. With roses in our pockets we rally round the tombstones. Ashes to ashes, we all fall down.