I think a solution to this whole fiasco is to bring a pvp vendor back, and make the reward on both sides honor points with which to buy gear, pets, t-mog, mounts, etc.
As for the balancing issue, I think they could make each region within the world work the way the old Wintergrasp pvp worked, with sharding, where if there were less people on one side, they got additional buffs to help them kill or defend against the opposing force.