I agree with your concerns to an extent. Character investment is certainly a big part of it. But at the same time, an isolated environment for pvp means they could more readily stomp out (egregious) problematic outliers and mess around with racials and whatnot without the concern for said changes’ effects on pve.
It might be heavily frowned upon, but I would dare suggest that the server limit the amount of characters you can create per season, and even have preseason windows where the restrictions are lifted.
If classic can maintain 3 separate “ruleset” servers, I imagine retail can support a dedicated pvp server. As I explained in that post. Said server could simply be a single major hub, refitted from any number of locales in the game without the need for the fully explorable gameworld accessible. With the necessary NPCs placed and perhaps a single area for pseudo open world shenanigans while waiting in queue. The framework exists and I don’t believe you would need a large detail to maintain it.