I think not only do you have a great idea on real open world PVP (that would also appeal to PVE'ers) but you bring up great points on why PVP failed...the simple reason being in the old system, is why PVP? The old system just promoted ganking and griefing for no reason. That did not sit well with a lot of people, and thus the exodus that happened 3 months after launch. Craig then thought he had to take the game in a totally different direction and, well, here we are now.

Your system gives reason and incentive to PVP.

This is more than just a PVP thread BTW, it is a great suggestion on how to integrate PVP into the game that appeals to all.

Great Job!

FC, please evaluate these suggestions...some very good stuff here. I really think that some sort of implementation of the OP would draw a ton of people back looking for a PVP MMO that means something and gives reason to PVP.