Do alternative server rulesets wreck PvP?

A commenter conversation a while back got me thinking about how server rulesets can make or break the PvP in a game, and not in the way you might expect. I've found that when a game offers separate PvE and PvP servers (be those PvP servers factional or open), the middle-ground players are left without a home. My World of Warcraft guild, for example, was opposed to the idea of a PvE-only server where people could flag but rarely would do so, and so we ended up on a PvP server, where smallfry ganking, rather than the Dark Age of Camelot-esque RvR we'd hoped for, is tediously and irritatingly commonplace. Neither choice is ideal because the populations are split along too sharp a line.

In Star Wars Galaxies, by contrast, the servers were PvE with factional-flagging consensual PvP, but because there were no full-PvP servers to bleed away the more hardcore PvPers, the population was mixed, and the PvP situation wound up being far more interesting for more players. PvE gamers who wouldn't dream of flagging for PvP in a game like World of Warcraft would see the Galactic Civil War being waged by PvPers all around them in SWG, and even though they could have stayed safely civillian and free from risk, that visible PvP made them much more likely to jump into PvP themselves willingly -- and isn't that exactly what MMOs should strive for?

What do you think -- do alternative rulesets divide playerbases and wreck PvP? Are mixed-use servers a viable way to involve more players consensually in side activities like PvP?

TH