Is WotLK and Cata script blend possible? If Not, consider splitting the dalliances; for example, Blood-elf, Forsaken, and Night-elf to make 1 faction. Next, Ork, Tauren, and Troll. Third, but not least; Dwarf, Gnome, and Human. How about making the Draenei into a "wild card" player; they pick their faction.
Just a thought.
I realize the potential problems, but I think you underestimate the gain; This Private group of servers is not a set of blizz servers which is why I believe they could make it happen. Warmane provides their "Mercenary" mode, they also provide a varying set of servers with different XP ratings, so why not create a new setting; instead of 1 faction against 1 other? Perhaps you never playedor heard of Dark Age of Camelot, or are even aware of Camelot Unchained... Ultimately, why not do this? Time, money, doubters like yourself?
Warmane wants a Blizzlike experience, this would delete that compleately, and it takes a lot of job to implement something like that, ToC/ToGC would be reworked, New gear would be implemented, it's a cool idea however, maybe if they opened up a whole new fun realm and tried this out on that, but again so much work for something that we don't know the outcome of, Players have a tendence to not want to play on funservers.