If travel is restricted to the starter faction provinces, they'd better be some f'ing huge provinces with lots to explore to offset this limitation.
Definitely and I believe ZMO definitely is not only trying to give us large areas to explore, but concentrated, quality content that we have come to expect in a TES game.
Both sides in this thread have definitely made valid points for their respective preference. Having world pvp confined to Cyrodiil gives PvPers more of a focused and quality experience while PvEers don't have to worry about gank squads and griefers. Having factions with closed borders also has the potential to build faction pride as all those within the faction are restricted to their territory and share the same common goals in PvE and PvP. Communication will also likely be restricted to factions so you will only have contact with your faction and no one else, further building an identity.
On the flip side, having closed borders limits exploration and crossing of different cultures. One reason so many players hold Morrowind as their favorite TES game is because the inherent racism the dunmer held for "outlanders" and the immersion that came with it. Provinces may be set, but traditionally while races may come from particular provinces, they are all rather nomadic. Players also lose the ability to quest with their friends if one happens to be a dunmer and the other a redguard. Having certain races restricted to certain provinces limits contact from outside enemies and as a result could potentially make virtual life much less dynamic and interesting than the racial disputes in the single player games.
Unfortunately, ZMO will not be able to please everyone. That is just the hard, cold facts. The great thing about MMOs is they are never done. Even if what is currently their formula stays in place up until release, I believe there are still additions to the system they can make to please more of the community. Whether being allowed to invade certain parts of enemy provinces after claiming the imperial throne or some other system that materializes, there are potential opportunities ZMO could explore. My hope is ZMO will actively watch their forums, especially during beta testing, which will be crucial. Communication between ZMO and the community will be essential for both parties benefiting, in theory.