Well said.
The primary distinction between an AI-delivered death and a PC-delivered death (to me) is the intent. The AI-delivered death is just hard-coded programmed reaction; if I get too near this NPC he will attack or if he patrols near me while I'm not paying attention and he attacks, that's just what he is programmed to do. Players, however, have ~intent~ in their actions. They MEAN to attack and kill me. To ruin my fun, to force what THEY want to do onto me.
That unpredictability is a source of great enjoyment to some, but to others (like me) it is exactly what I do NOT want and I avoid it at all costs. That's how I like to play. I like to have as much control as I can in the game world because, frankly, we none of us have as much control in real life. I don't want a real life simulator, I want an escape, a game where I can feel powerful and in control and not subject to the whims of some jerk who cuts me off in traffic or dumps extra workload on me to avoid it himself. In a PVE setting, I can interact with people on MY terms and they cannot affect my enjoyment.
It may "solve" future problems (I doubt it) but it does nothing for the fact that my experience WAS ruined; it's a reaction, and it's one that forces ME to change, to do something I had not planned to do, nor wanted to do, all because someone else thought his enjoyment was more important than mine.
That's the plan (avoid PvP) but unfortunately, to ~lure~ people into PvP they often place PvE objectives/rewards in PvP areas. Then it becomes a balancing game, determining if the things you want are worth the potential frustration and annoyance of facing PvP. If they had separate PvP servers, it would be a non-issue but we're stuck with one mega-server that will try to mix the two playstyles.
This is where the differences in people come out; if I had been you in that situation, I would not have attacked the higher level guy at all (why would I? Let him live his virtual life how he likes)... If I had been the higher-level guy and (somehow, miraculously) won, I would not feel elated, I would feel perhaps mildly relieved that I'd been spared further frustration but that's it.
If the higher-level guy had attacked me and my friend and beat us both, I WOULD get mad, but I wouldn't rage about how he was "better", I would rage that he had accosted us when we did not WANT to fight. I would not want to level up and get better gear to beat him; I don't CARE about him, or beating him in the future, i just want him GONE, to leave me alone to enjoy the game the way I want.
If all PvP were entirely consensual, I would have no issue with it whatsoever --- two guys want to fight each other? Fine, have at it and may you enjoy yourself. Where I have an issue is when PvP is forced onto someone who does not want it. Some people LOVE to "gank" like this, and those are the people who drive other people away from PVP.