What you're suggesting sounds fine on paper, but in reality, it would probably show as creating nothing more than a zergy pvp, a type of which the Lotro pvp system really isn't designed for. It would also require a whole new, bigger map, and especially stability of the servers without significant lag, and since Turbine obviously has problems with even small population servers (not to mention the high pop. ones) experiencing serious consistent lag spikes in pvp (and occasionaly pve for that matter), i see it as fiction.
Current pvp, with all it's flaws and balance issues would still be enjoyable, if they only fixed the lag issue, which is slowly killing the will and desire to play in even the most dedicated veterans, that sticked with the game for years, at least that's what i'm seeing.
If Turbine managed to somehow find a solution to that problem, and perhaps even merge a couple of really low population servers (don't get me wrong, i realise there's people out there who enjoy smaller communities), i think that would go a long way towards long term "success" of this game.
Vilya: Healadder (defiler, R10), Kommisar (stalker, R7).
Snowbourn: Superserial (warleader, R8), Steelstack (reaver, R6).
Brandywine: Manvet (champion, R10 - Retired); Stargash-1 (reaver, R12)