To me, exciting would be something that gates some content behind a challenge that involves skill. Currently, while finding certain resources might be challenge, it is so on a basis that places emphasis on luck. You can reach the best of technology without purposefully fighting any creature and almost without traversing to any dangerous terrain (almost, because deep underground and certain climates might count, but again, it depends on your luck).
Another thing it would help is that without PvP, you wait until you get the best armour and weapons with fighting enemies you don't have to, simply want to, because it's a high risk, low reward activity. Limiting the accessibility of better materials would increase the value and attractiveness of worse materials. Then again, making brigandine armour is a lot of effort and chain and plate ones are outright exhausting, forcing players to "waste" energy on creating obsolete items would be cruel.
A game, by definition, does have a goal or an objective to achieve. Other than that, I don't really disagree, but I think that if your effort had a quantifiable meaning, if it made you progress towards achieving some even optional objective, it would have an external justification for existence. That you don't play the game just because you're bored, but to beat it or certain parts of it and get rewards. I don't think that this game being a sandbox and offering the player challenges are mutually exclusive features.