I like festival time in Middle-earth. There is a festival for each season, and each runs about a month, so either it is festival time now, or it was last month, or it will be next month. World of Warcraft has something similar with its seasonal events. About half of each month is a festival.
As games age and have more events, they should repeat and accumulate rather than cycling out. All seasonal and holiday content can be re-used for future years. (I gladly exempt Kingdom of Loathing‘s Crimbo season from this rule, as I always look forward to the next winter solstice’s insanity. They do recycle all the other holidays, however, and they appear whenever either the real-world or in-game calendar would have them.) Just keep adding a few more each year until the game world is always having some kind of festival. If you run out of seasonal and holiday events, re-invigorate some little-used town with a local event. Have competing local events on the same theme. Come to think of it, having competing potato queens as event quest NPCs would be awesome.
City of Heroes has a slightly different take on this. Instead of adding new holidays each year, they add new events to existing holidays. The previous content still exists, but each year makes it bigger. Halloween features trick or treating and the great pumpkin and costumes and a haunted giant and zombie attacks and the apocalypse and oh my goodness.