"This sort of thing could encourage other players to play a king of the mountain variant, or it could suck as particularly reviled players are voted into legend-dom against their will,"

Yes, it becoming a popularity contest is an obvious risk.

"Instating special abilities like enter/exit messages, <daily/weekly/monthly> mud-wide refreshes, a separate section on the who list, access to using the "guild high-mortal skills" spoken of in other forums, or other light perks would probably be in order, if this route were taken."

I am not sure I am for giving anybody special abilities (possibly) based on popularity, really.