Hussar, that's an interesting question you've stumbled across, and an interesting paradigm for how to approach it. Although not exactly with the same paradigm, I've given some thought to the question in other terms. Actually, I think that fantasy-dom in general is grappling with similar questions; I'm more and more struck by authors that are striking out away from the "traditionalist" Medieval fantasy approach and bringing other paradigms to bear on how to view their fantasy.
Let me, if you will, distill a few points out of the thread and respond to that distillation rather than to any specific post, though.
1) Mundane vs. mythic refers, if I understand correctly, to how "integrated" the fantastic elements are to the setting. I.e., is it a pseudo-historical setting with magic and monsters popping up as one-offs that make no difference to the setting overall other than to have the same kind of feel as a mythic character like Hercules or Beowulf? Or does the setting integrate that into its fabric, thus becoming something other than pseudo-historical as a result?
Yup. That's my take on it. If these things exist in the world, are known to exist in the world, then someone, somewhere is going to exploit them and once they do that, everyone will do it.
2) Although labeled at various times within this thread as a fantasy paradigm vs. a science fiction paradigm here in this thread, as a few have pointed out, it's not anywhere nearly so clear cut in the genre-space. Lots of science fiction doesn't really integrate the fantastic technology that it purports, and resembles instead something close to "stock sci-fi" with the fantastic elements grafted on in a "mythic" sense. Some fantasy also tries to integrate the fantastic elements, like Dark Sun or Eberron--although I'd argue that it's more of a handwavey token gesture in most cases rather than fully going through the exercise of really integrating the fantastic elements. Frankly, I think that's what most people want; lip-service to rationalism rather than a full-blown exercise that will probably only appeal to a hardcore niche of the market and will be too exotic and strange to be useable for almost any game that I can imagine.
Again, totally agree. It's not a genre specific thing at all. And, I probably shouldn't have painted it as such in the OP. It's more that I see it occur more often in fantasy than SF. Probably more because I read a lot more SF than fantasy.
I mean, heck, look at Harry Potter or any of the Urban Fantasy stories. There are settings where the fantastic is woven directly into the setting.
3) I know nobody here has implied as much, but there are other paradigms besides "science fiction" and "traditional fantasy" that can be brought to bear. To offer at least one counter example that's been prevalent in many of my games and settings over the last several years, you can take a supernatural horror approach to the question. This one is interesting (in my opinion) because it offers possibly a holistic approach that covers both the science fiction and fantasy approaches, at least in some ways.
In horror fiction, the fantastic elements are never "mundane"--they are almost always exceptional and rare, and the world appears to be, at least at the get-go, much more familiar, not too unlike the pseudo-historical approach that traditional fantasy has. However, as the characters delve into it, it often turns out that the world is different than it appears to be, and that the fantastic elements are more tightly interwoven into the setting design than it first appears. This can come in at least two forms: a conspiracy-theory, secret history form in which everything the characters thought they knew was wrong, and it turns out that the fantastic elements really drive a lot of what's happened in the world and what's happening in the world after all behind the scenes. Or it can take a Lovecraftian approach, where (to paraphrase Shakespeare along with Lovecraft in the same thought--if that isn't too pretentious and strange) there are more things in heaven an earth than our philoso[phy is capable of rationally understanding, and to journey too far from the familiar shores of what we think reality is into the true nature of reality is to risk our health, our sanity or even our very humanity.
I can buy this paradigm, sometimes. Sure, I can totally see that some things might be hidden and not exploited. But, my problem is, once these things have been revealed, why aren't they being exploited?
And, to look specifically at D&D, these things are not hidden at all.
From a gaming perspective, I think it's a bit dangerous to go too far into exploring the nature of the setting. That way is risky, because most players are into showing up and having fun, often on a somewhat superficial level. Or, if not superficial, their enjoyment comes out of exploring their character, the relationship of their character to the other characters, and other things. I don't know that exploration of the deeper fabric of the fantasy setting or the fantasy genre paradigm are going to be something that they take a strong and sustained interest in. So, it's something that has to be done somewhat carefully, and I think level-setting up front is important.
For this reason, when I describe my setting to prospective players, I make a point of talking about the play expections. "It's a dark fantasy setting; it may look a bit like D&D on the surface, but as you get further into it, it's really more like Warhammer or Call of Cthulhu." For instance.
Yeah, I can get that. I know that my first foray into Dark Sun, currently, has been a bit challenging trying to catch up on the proper nouns and whatnot. There's just so much history and culture here that I'm a little intimidated by all of it.
OTOH, I think the DM can parcel it out in chunks over the course of the campaign. If the opening area is fairly run of the mill - not too many setting specific elements, and then, every session, introduce a small number (say 1-3) setting specific elements in such a way that it seems natural, then I think it doesn't make things too hard for the player.
Forex, Zeitgeist starts you out in the city with lots of steampunk machinery. But, the steampunk elements are fairly in the background - other than the warship of course. (I don't think that counts as a spoiler since you get introduced to the warship in the very first scene). As the adventures continue, more and more setting specific goodies can be introduced.