Possible to create IP-to-USB HID (keyboard) device using Arduino?
Yes, it is perfectly possible.

You ideally need an Arduino with a direct USB interface, such as the Leonardo. Then you can just access the Keyboard object to send the keystrokes to the PC.  How your receive the data through Ethernet is entirely up to you. A simple TCP interface may be easiest - open the connection with whatever telnet-like client and whatever you type gets sent through.  The trick will be getting it into character-at-a-time mode.