That certainly is a large part of the problem, but there's more.
Here's why World PvP sucks:
Sharding
You split the population of a server up, so you have less targets and less people running around and running into each other.
No Incentive
The average player needs an incentive to do world pvp. There are no rewards for killing players, so people don't engage in world pvp. You have to make the average player want to go out and look for enemy faction players and kill them. Flipping capture points and blowing up NPC's in enemy territory is not a way to do this. There need to be concrete rewards for players that engage in world pvp, and its consequences should have such effects on the game world and its players that they would want to engage in it to bring about a favourable outcome for their faction.
No place to do it
Other than Ilum (which is done wrong), there's no real place that dedicated to world PvP. There needs to be a place that both factions will want to go to, and that place has to be designed in such a way to promote PvP. How about a high level area on Tatooine and Alderaan, full of extremely valuable resources and high level dailies, with capturable nodes that provide a benefit to the faction that holds them. Players will want to go to these places to farm these rare materials and complete these dailies, and there should be dedicated quests and rewards for killing enemy players and defending (not capturing) in the zone. Control of nodes would give de facto control of the planet, which would open up exclusive instances, quests and rewards for the faction that controls them.
No prestige
We need a ranking system that gives players titles and gear (exclusive reskins, speeders, vanity items...etc; nothing that upsets balance) based on their rank. Moreover, I'd like to see "rank abilities." Say there would be 15 ranks, from 1 to 15. Rank 1 is a Private, and your ability isn't strong, so it would be something like a temporary buff. Higher ranks mean you have a stronger ability. Rank 8, a Lieutenant, would be able to call in an air strike. Ranks 12-15, Generals of varying grade, would be able to do something epic that could turn the tide of a battle, like an orbital bombardment or summoning a number of elite NPC's. These abilities would be only usable in the designated zones. Ranks would also have to be arranged in a pyramid structure, so that eventually, a year or two down the line, we don't end up with dozens of Generals running around and dropping orbital strikes by the boatloads.
Events
One of the problems with large scale world pvp is that it's difficult to get everyone together at the same time. So, plan events. Every hour, Imperials and Republic would alternate attacks on their bases, supported by copious amounts of NPC's. If your attack succeeds, you get to sack the enemy outpost/fort/city, and completely control the zone for the next hour. WoW's Wintergrasp, for all the hate it got, was awesome, and I'd love to see something similar in SWTOR.
Population balance
20 Republic vs. 60 Imperials isn't fun. It's quite obvious that there are problems with faction balance on many servers. How about providing incentive (extra xp, credits, all kinds of nice things) for players to roll a member of the underpopulated faction?
Moreover, I came up with an idea that could technically fix this problem, at the cost of "RvR-ization" of the whole process. The zones I previously mentioned, on Tatooine and Alderaan (because you actually have to have people care about the planet they are fighting on, and these two planets are known by everyone and it is prestigious to "control" them), would be instanced. Meaning if you want to enter them, you have to go through a loading screen. Now here's where it get's interesting:
Say you're on a server that has 60% Imperial and 40% Republic population. It would suck for Republic players to engage in PvP and be outnumbered like that. So you could do something akin to WoW's battlegroups:
Create a "grouping" of 2-4 servers that effectively balance each other's populations out, so that while individual servers may unbalanced, the whole group is roughly balanced out:
60% Imperial, 40% Republic
50% Imperial, 50% Republic
65% Imperial, 35% Republic
40% Imperial, 60% Republic
These servers may be PvP, RP-PvP, or even PvE/RP-PvE. Remember that these areas aren't technically the "open world" since they are instanced, so PvE players will be aware that by entering these areas they are exposing themselves to PvP. The cool part about these grouping is that you could shuffle these servers around, bi-monthly or even monthly, so you don't end up playing with the same people all the time. That and you have a larger pool of players that would be able to participate.
Community
Along with creating a lively PvP environment for the players to play in, this is the most important part. This game needs server forums, because without them there is no community. Servers need a place where players of both factions can get to know each other, get familiar with guilds and players on the opposite faction, build rivalries and even trash talk (which is healthy for the community, unless it get's very excessive).
Do all of the above Bioware, and you would have created a game that, in 10-15 years, people will remember fondly just as they are now reminiscing about Dark Age of Camelot.
I realize that somewhere in the middle of the post I went off course, but I had to spill my heart. There are some things that might not work too well, but everything can be tweaked in such a way that the whole system would come together nicely.
The current PvP system is such: You hit level 50, and start grinding daily quests, Warzones commendations and try to do some PvP on a poorly thought out and implemented Ilum, with the ultimate goal of getting gear, so you can end up doing more PvP to get even better gear, ad infinitum. This kind of sucks. What's the ultimate goal of PvP? Gear? How about Bioware change this up a bit? 1. Warzones shouldn't be the primary form of PvP. They should be a side-dish, something nice to have on the side, a PvP activity you can engage in if you only have a short amount of time to spare. 2. Faction PvP should be the primary form of PvP: Republic and Empire fighting for control and influence over planets and star systems, with shifting front lines and actual impact on the galactic environment. Ilum could be one of these planets, but at the moment it is very poorly implemented, and made much worse by the obvious population imbalance (something BW has to address before anything else). 3. As for the gear grind: many players see getting gear as progression. That's true, but it's not the type of progression that should take place in PvP. PvP is Player vs Player, not Gear vs Gear. If one wants to showcase their skill, what better way to do it than on a level playing field? Therefore, PvP gear should be standardized (much like in Guild Wars). But what about progression? Well, there's other types of progression. Ranks, titles, cosmetic items, prestige, being well known and respected within the community....etc. Those are the kind of things that keep people playing and having fun, instead of being crushed by someone who has better gear than you and you not having a real chance to begin with. That and the fact that players want to have an impact on the game world, and with shifting front lines and server-wide benefits for territory control, they can have that. So the question to ask yourself is: do you want SWTOR's PvP to be more than just an endless gear-grind through the endless repetition of Warzones and grinding kills on Ilum? This is an issue that must be resolved before the release of GW2 if this game is to survive in the long-term.