I have two ways of looking at this.
You can have a Realism based roleplay where it goes for realism above all else. The main problem is that it is something that most people will not like. It has a very niche following (The super serious, if you would) which most people wouldn't find fun.
On the other hand, narrative based stuff is what everyone should be here for. Just enough realism to make it believable for the setting, grounding it down to some form of established reality. You do not want to overdo it as that can take away from the fun. But, you cannot disregard it entirely otherwise there are no stakes, nothing to ground the rp down.
An excellent example of realism vs narrative would be in a game like D&D.
There are realism rules that people can go with that are often handwaved as they don't impact the narrative all too much. This can include things like rations and the likes which are often glossed over in favor of going to tell interesting stories. Realistically, you would need to buy all of your rations and count out how many you've used, how much all of them weigh, etc. Most groups don't do that as that is tedium for the sake of tedium. But some groups love that. They love the gritty, hardcore, tedious aspect of it. It just isn't everyone's cup of tea.
On the server (And for roleplay in general) we need to strive to meet that balance between the two. One that allows for our narrative to flow and build but not get too out of hand.