You are actually incorrect.
Patch 1.12.0 (2006-08-22):
For the first time in the history of World of Warcraft, you will be able to face off against players from other realms in the Battlegrounds. PvP Battlegrounds link Alterac Valley, Warsong Gulch, and Arathi Basin so that players from several realms will be combined into one huge matchmaking pool. Replenish your mana, sharpen your blades, and get ready for some brand-new challengers!
http://wow.gamepedia.com/Battleground
1.) Blizzard didn't experience Faction Imbalances not because they had cross-realm BGs, but I believe, because they had free faction transfer from highly populated faction to the other.
http://www.wowhead.com/spell=59752/e...mself#comments