I started out hating it, but it grew on me as I kept reading. You've thought it through pretty well.
As far as negatively impacting the game, the only thing I could think of would be creating greater PvP imbalance. But on the other hand I can see people queuing up on the lower pop side for the faster queues. Therefore IMHO this issue's a wash.
Personally I'd still prefer the ability to have a class ending quest that allows you to switch sides somehow, but I realize this probably isn't remotely possible.
Well thought out and written post. Props to you.