What Joel meant was coding work. And I guess your idea of factions (which I like) would involve a lot of coding work. Apparently, FC have the tools to create PvE content, so all they need to do is to create some graphical / animation assets and scripts and there you go. But they don't have the coders to implement deep changes to the way PvP works. Sad but true.
Here's Joel's post:
http://forums.ageofconan.com/showpos...2&postcount=10