On Baja, EM Vincent came up with a pretty neat system to include villians and reds within the lore and story arc. While he played a character named Archimedes the Old as the Commander of the Royal Guard, he drew Julius Dryden from the Ultima Series lore, and came up with a rival faction - the Partisans of Chaos. Good aligned characters could join the Royal Britannian Guard, and evil people could join the Partisans. There was PvP combat involved, although he warned both sides ahead of time so that blue players were caught by suprised and torn to shreds. Its really too bad that the developers decided to cancel the event moderator program, because (on Baja atleast) we had an excellent event moderator.
Nonetheless, while I would love to see events that included some player vs. player combat, but as long as there is this savage mentality amongst PvPers that includes griefing and ruining events, we wont be seeing such anytime soon...
...On the other hand, there is a such thing as player-run events. I don't see why PvPers can't have scavenger hunts, capture the flag, and other events where blues are invited to come and PvP. It might be a good way for reds to actually introduce blues to PvP without griefing them in the process. Who knows, you might actually turn a few blues around and see some new interest in learning to PvP?
On Baja, Underground Knights hosted an event where they renamed several PvP-characters "a turkey" and polymorphed them into a chicken, for thanksgiving. Players were handed clues to where the turkeys were at, and you would search Felucca for them. They carried uninsured artifacts and gold, and it turned out to be a fun event. *Grins*