Separating PvP from PvE

Ontherocks wrote me a lengthy proposal, which I am just going to quote here:

Here's a thought. What would be wrong with making PvP earned gear only usable in the open world and BGs/Arenas? Or to put it another way, you can't wear it in PvE instances.

1. People who are PvPing for gear to fill PvE gaps, wouldn't bother, resulting in...
2. LFG for regular 5mans and heroics would increase again, as gearing for raiding would require those runs.
3. You would have to enjoy, truly enjoy PvP to spend time earning gear that could only be used in that manner.
4. PvE gear is inferior for PvP purposes, so there is no conflict with allowing it in the BG's.
5. (Here's the biggie) The shift to a positive sum PvP system is what brought this on. I agree it's more fun and inclusionary, BUT the game overall is worse as a result. This solution lets you keep the Positive Sum PvP, but preserves the PvE experience.

The situation I see on the 2 servers I play on, is that Large Prismatics are considerably more expensive than Void Crystals. That is hugely telling about the state of this game right now. It says:

1. No one gears for Karazhan via 5mans...
2. because it is easier/faster to pick a reward and get it in a week, rather than go through the effort to LFG and hope for a lucky drop from a 5 man, that is worse than the PvP item
3. PvP gear make Kara incredibly trivial, and more so as each new season of gear is released.
4. The result is void crystals in abundance, and very few in 5mans to DE gear and supply the LPS.

Is removing the ability to wear PvP gear in Raids a drastic move? Sure. But it would allow the game to have better PvE/PvP balance.

Now, the economist in me says that I can't stop here. I have to look at the impact to PvP. It will obviously impact the numbers of people who choose to PvP if that is the only change. But there is a finite number of players on a server, so you can't really both raise PvE interest and keep PvP interest at it's current high levels. But at this point, Blizzard is completely free to incentivize PvP however they see fit, without regard for it's impact on "the other game". If the result is that the BG's die completely, then they just got a lesson on how not fun their implementation of PvP was to begin with (read: no one was there for fun). I don't see anything wrong with letting the BG's continue to be a place to gear up for Arena's. They are the Endgame of the PvP game. Add more PvP quests so that gold can be earned in that game as well. Objective based, repeateable daily PvP quests (more than just "win an AV", I mean real quests.) would add depth.

I think PvP and PvE can coexist but not the way it is now. One cannibalizes the other unless they are separated.

I'm not doing PvP, and haven't done so since before TBC came out. But my guild chat tells me that sometimes over half of the players in AV are leechers, just afk or chatting in the starting cave to get free honor and badges for PvP gear. Apparently the new reporting system isn't doing enough to discourage them. But if PvP gear wasn't useable for raiding and dungeons, I bet they would be gone pretty fast.

On the other hand, the more you separate PvP and PvE, the more you force people to choose one or the other. Few will have the time to do both if the gear from one isn't useful for the other. Face it, PvP in WoW is *not* popular by itself, most people are there for the "welfare epics". If those would be made less useful, we'd go back to long queues for battlegrounds, because too few players would be playing PvP. So what do you think?