This idea has been suggested and implemented before. I think it could work given certain circumstances, but as [USER=9212]@Sevak[/USER] has said, the population in factions is incredibly low, so if it does make a difference it would not be very noticeable.

With that said, my thought is that reigniting pvp should not be the primary focus of the players, but instead should be directed towards player retention in factions. PVP will naturally follow if the factions world is filled with players.