Truth be told, that's deeper than I ever analyze it when building a world.Though it does make me think that there's a difference between designing a setting for the purpose of showcasing a conflict, or designing settings as primary and devising conflicts to showcase the setting. Dark Sun and Midnight aren't about carousing, because the settings are built to set up basic ongoing conflicts for survival. On the other hand, Al-Qadim's built to deliver an Arabian Fantasy experience, so its conflicts are designed to showcase Arabian Fantasy. That's probably something to keep in mind as part of any discussion about the setting design process.
That can be quite interesting, sure! And sometimes the settings are implied-pessimistic, or at least implied-cynical; the "penal colony in a dungeon" campaign didn't have a lot of leisure time and expensive taverns. It can be very engaging and challenging when your victories are measured in how little ground you give up, rather than how much ground you gain.
In the beginning, my settings were 'the dungeon' and the immediate environs - the Temple of the Frog in Blackmoor, El Dorado County in Boot Hill, and the Warden in Matamorphosis Alpha strongly influenced how I saw roleplaying game settings.So, how do you design your homebrew campaign settings?
If I like a published setting, I run it more-or-less whole - then again, I tend to pick settings that provide opportunities to extensively personalize them, like Charted Space for Traveller, El Dorado County for Boot Hill, the Warden for Metamorphosis Alpha or the Wilderlands for D&D. I use other settings for inspiration, but I don't lift chunks from them and plop them into a homebrew setting.What do you look for in published settings? - to run whole or piecemeal to your homebrew?
I think settings benefit from diversity. I want geographical diversity - deep oceans, shallow seas, soaring mountains, sweeping plains, trackless forests, sweltering jungles. I want cultural diversity - this is one of the reasons I tend to like real-world settings more than any other, because few fictional settings even attempt to come close to the real world. I want metaphysical diversity - gods and magic and monsters and a world that reflects all of this.What makes a fun campaign setting for you? - As a DM? - As a Player?
Other than the settings I mentioned above, I like Pacific City (from The Nocturnals) for Mutants and Masterminds, the Old World for WFRP, Arthurian England for Pendragon, and Manifest (from Ghostwalk).What are some examples of great campaign setting design?

(Dungeons & Dragons)
Rulebook featuring "high magic" options, including a host of new spells.