I don't really have a maximum in mind, but would limit it based on whatever time you think should be devoted to other things. For instance, if you feel he hasn't read enough or done art enough lately, limit it to enable that, or allow it only after the educational activity like Bostonian does.
Using desired activities or things as an incentive sounds good. I recently told my son I'd give him two Beyblade tops for each half year of Singapore Math completed (we started with 3A to make sure he didn't have any holes in his knowledge, which unfortunately even with slight compacting made it seem like a big chore to him). It worked, and he plowed through a half year in a couple of days.
My main worry with interactive games is (of course) that they will make my son passive. When I let him play online, it's mostly problem solving types of games like Meeblings and Bloons Tower Defense 4. The only role playing game I let him play is Nethack, which doesn't carry the same risks as a MMORPG. He also likes other computer games (Master of Orion 2, Warcraft 3, Crazy Machines etc.) but I tend to let him play them only on certain weekends. During the week we play board and card games exclusively; it's just turned out that way.
