Warmanes concept of mercenary mode is that allys can be placed on the horde side in a BG but not vice versa.
The ally side consist exceptional of ally players while the horde is a mix of ally and horde.
In consequence the ally side will always be favored because they tend to have the better geared players.
Even when MM would be applied to Icecrown it wouldn't be possible to create balanced BGs because the pure ally side would remains stronger than the other side of a horde and ally mix.
Cross-faction BG means that players are treated faction less and can be placed on either sides of the BG.
It has the advantage that it's possible to create a perfectly balanced BG with that system.
Horde or alliance wouldn't matter anymore, instead the teams can be sorted depending on the gearscore and the role of each player.