I think the game has to move beyond the only lore being about factions vs faction. It much more compelling to consider individual civilizations.
Blood elves have a mostly alliance of convenience with the Horde. They have some horde races they are tensions with, ie. undead, some trolls. They have some alliance races they likely highly grateful for i.e. draenei. They likely have few concerns about humans from stormwind, but are very betrayed by humans from lordaeron (and kul tires, gilneas) They probably feel somewhat betrayed by iron forge.