Could you imagine WoW doing this, blocking off all of this content and PvP potential? It wouldn't happen. Should the Elder Scrolls Online do it? Hell no!
http://i.imgur.com/OFOaJ.jpg?1
http://i.imgur.com/tPDqV.jpg?1
Enjoy! (Remember, it's from an Alliance perspective)
If the Elder Scrolls is to become as it says 'the next great online RPG', it needs to cut the faction-locking, this isn't something a high quality game does, and it can be solved by a number of ways.
1.) A toggle on/off PvP flag. You enter an enemy territory? You will be flagged for PvP, enemy NPC's will attack you and give you a hard time. You meet a native enemy player? They will not be flagged, meaning they don't have to fight unless they flag themselves for PvP, if they attack you they will be flagged also.
2.) The Questionnaire system may work wonders for open-world PvP. Answer the question 'Do you want to PvP outside of Cyrodiil?', if you answer yes, you will fight with those who chose yes also, making sure you only fight those who want to participate in open-world PvP. If someone choses 'No' on the question, they will not come in contact on the megaserver with those that want to PvP outside of Cyrodil.
There are more ways, but I don't want to drag this out, I've been doing it enough on these forums, I just hope I can sway some of your views and make the developers change their game for the better.