Of course its all for the gear. But there are still plenty of 'factioners', on GL at least, that were playing in the system long before the gear.
That idea would work, to a degree. The one thing I have against it (and the many other ideas Ive heard), is that it could help the corrupting faction keep an iron grip on the towns. Through the years I've seen many guilds, even entire alliances, from across multiple factions, all get up and leave because they simply couldn't get the towns as hard as they tried. So all in all, I have to be against any incentive that makes the corrupting faction overly powerful, or gives any sort of "tweak" to their base.
Edit: Really, the only way I can see for the devs to make good on what they did to factions is to allow it cross-facet. I'm yet to really hear one decent argument for why it shouldn't be.