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I think you are loosing sight of the bigger design issues of an MMO. The way I see it you can make a PvE game with some PvP aspects to it, or you can make a PvP game with some PvE aspects. Let's say Blizzard were to change PvP as you have suggested to make the conflict 'meaningful'. First the focus of the game would have to shift almost completely away from PvE. Various factions, guilds whatever will dominate certain parts of the map effectively shrinking the world which players can explore for PvE. Second, the game becomes even MORE gear oriented; and certain guilds will almost entirely dominate certain areas. This would be anologous to how some ridiculously equipped linkshells in FFXI camp (and thus own) certain high level areas on certain servers. Also, the ability to solo quests, grind whatever would also be SEVERLY compromised as you would almost certainly have guilds, players camping certain areas. Like let's say you wanted to farm essences to make money or equips... in your world, I don't see how that can be done without having an entire guild helping you out (else you'd be getting ganked about every 10 seconds). So then, certain guilds/groups could then effectively monopolize certain items in the game... thus, they could then drive prices up of whatever. This is one example of how a seemingly great game tweak would drastically change the nature of the game. The appeal of WoW over other MMOs, is the ability for casual players to advance; what you're suggesting would inevitably kill this idea.

In the end, WoW is first and foremost a PvE game; and, from what I can see, that is also the way the game is advertised. If you want better PvP, go play a PvP oriented game and stop winging how a game designed for PvE isn't meeting your PvP expectations. WoW is designed to be accessible to all level/dedication of players; if you want to go hardcore gaming/guilding do something like FFXI (a game where soloing is all but impossible; how well your guild is equipped determines how much of the game you can do/which equips you can ever hope to get, etc, etc... and that game doesn't even have the PvP, but linkshells do compete for mobs/territory).

Lastly, please don't blast me for critiquing FFXI; I merely used it as an example as it's the other MMO I am most familiar with outside of WoW. I really liked FFXI (was a lvl75 Black Mage on Valefore for a long time), but after being a lvl 60 for awhile in WoW, I've come to see the strengths and weaknesses of both games. More importantly, I've seen that MMOs are like anything else: their design has to be a give and take. A game can't be all things to all players.