While i can appropriate the need for factions to exist, it was a gimmick that sold in 2007, but since around MoP has only caused problems. In reality we have reached a point where the divide is causing more problems in the community then its actually creating enjoyment in the game, this is evident in the myriad of “X favoritism” threads.
The war story as a main focus story has failed, objectively, as every time its tried, it only ends up with more and more back lash. It a fully possible to allow cross factions, guilds, raids, dungeon groups, communication, and still maintain faction identity quite easily.
Factions can determine starting zone, they can determine cities you can and cannot enter, they can effect the stories you see in zones, or what side of pvp you end up on, which already is a none issue since you all implemented the merc mode were you can fight on the other side. Truth be told a breaking down of faction restrictions would actually be healthier for the game in the long run.