What if your players figure out what they want to do in the setting you have created and invent their own adventures though? I mean isn't this just as valid, or even moreso, a way to create satisfying play for both parties involved?
I'm not saying that you must lockstep the players into your single railroaded plot. Heck, that's just as easy to do with a well developed world. See the Time of Troubles. See the Dragonlance modules. Both highly developed worlds with lockstep railroad plots. Having an overarching story does not equal railroading.
Take Savage Tide for example. If the players choose to completely ignore the plot (the Savage Tide is coming), they can certainly do so. But, then the world will be destroyed.
A lot of this is solved by having your players buy into the campaign in the first place. If they want a very open ended campaign, they should tell you so at the outset and you can plan accordingly. Or, if you are basing the campaign on their backstories, then you obviously don't need a larger over arching story line.
But, you still don't need a lot of world building either.
I disagree here. IMO, a well crafted setting by the nature of being well-crafted allows PC's to create their own stories. It is simply a vibrant backdrop for the goals and aspirations the PC's have and will pursue.
Creating a "story" however assumes you know exactly what your PC's want to do... and if they don't want to do it, your setting (since it's built around that particular story) is less likely to be accommodating to their goals on the fly.
Again, you are connecting "story" with railroading. That's simply not true. Having events in your campaign world that unfold independent of the players is story or plot. It is not railroading though.
See, and a well crafted setting can help as an inspiration for the PC's, I'll agree with that. However, it can also seriously impair creativity if handled badly - you cannot be X because page Y of setting book Z contradicts you.
There is also the issue that you wind up with a "tour des Realms" sort of campaign, where there really isn't much of a story, the DM just wants to show off his work of art and leads the players by the nose from point to point to point, not because the story would be better for it, but because he doesn't want to waste his hard work.
Not that this will automatically happen, just that this very much can be a pitfall of heavy worldbuilding DM's.
This style also assumes that the story you create will be a good (in relationship to what the PC's want) story, but what if it isn't? Since the setting is built around this particular story, instead of being an interesting setting ina nad of itself, the game's fun is based solely on whether your idea for a story and it's implementation are enjoyable to all at the table. Now if one has a setting constructed not to suit a story but as a setting, well then again the PC's can, if they desire, create a more suitable story, by exploring those aspects which intrigue or interest them.
Again, this assumes a couple of points.
One, you've assumed that the DM is working completely separate from the players and is not taking into account anything they want. That the DM comes to the table with an entire campaign and says, "Who wants to play". You can do that, but, you don't have to. A DM could also base his entire campaign on what the players hand him and still not do much or anything in the way of world building. The players could drop hooks and plots in their backgrounds and the DM can build his campaign around that. This does not require world building.
Second, say that the DM does come with a complete campaign to the table. This is a table issue. The players have to buy into that campaign beforehand. If I come in with Savage Tide and the players aren't interested in that, then I would be a very poor DM forcing them to play it. For the same reason that if I come in with a Forgotten Realms campaign and no one wants to play in FR, then I would still be a poor DM for doing that.
World building or lack thereof isn't really an issue here.
I think your basic point is highly dependent on the players and DM. IME, my players use to need a "story" handed to them, but after some awkwardness and frank discussion I realized they were becoming use to this mode of play and I really wanted to see the type of "story" they would craft given free reign with their characters... and so I started designing a world, giving them about 2 pages on it... and from there they would design a character who fits in that world. The funny thing is I realized that some of my players had stories they wanted to explore from the minute they created a character and they could more easily direct the game to accomodate that in this manner, while those who didn't were more than happy to tag along, kill some things and play a part in the other's stories. YMMV of course.
My question is, did the players who had stories they wanted to explore the minute they created a character have stories in mind that were expressly tied to your setting? Or were they more concerned with specific themes or tropes? "My wife was kidnapped by slavers" for example isn't tied to any specific setting and can be done in pretty much any setting. "I want to explore unknown areas" can be done with a random encounter chart and a map.
IME there are extremely few themes or concepts that cannot be ported into any setting from any other setting. Thus, they are pretty much independent of setting.
Yes, obviously, you have to do some setting building in any campaign. I know that and would never try to run a "Waiting for Godot" style campaign. But, by and large, you can go beyond the specifics and look at the themes that the players want to explore and build your campaign from there.
All without having to spend several hours, as GregK wants us to do, detailing a page of information for every single culture before you even start the game. While that doesn't sound like much, that could easily be ten, twenty pages of information you have to create even before you sit down to write your first adventure.
To me, that's about nineteen pages too much work.