I think you make good points except in this little part:

"There are rewards for winning, but more than anything players find the mechanics of the experience to be the ultimate incentive. Rather than focus on loot, gold, and points, mmo designers need to go back and see what makes the core experience fun rather than what carrots they can place at the end of the stick."

Currently a great majority of MMO players don't care about fun but about the carrots in the end of the stick. Heck, one of the games that suffers the most wiith this mentality is WAR.
The PvP there when it happens is a blast, really entertaining. However, in the vast majority of times the players prefer to attack empty keeps and BOs because it has bigger carrots. And this in a game where gear is not that important to the PvP (you need to obtain gear for the PvE and the fights against Fort Lords and Capital City encounters).

In my opinion what Collin Brennan is defending is that PvP needs to evolve beyond BGs and player combat. However many games already did that! Hell, he even mentioned them.
EVE, WAR, Darkfall and other games all have a PvP system where combat is only part of the picture. They all have different systems but did many things beyond tacking battlegrounds. They have fully fledged PvP systems (some of those games still need a lot of improvements like WAR and Darkfall though). The average MMO player is more interested in PvE than PvP.

It's been basically proven that WoW players will do just about anything for purple loot.

The reason the Arena popularity has dropped? It's no longer the easiest source of loot. What does that say about how many people played Arena before because they enjoyed it?

Wintergrasp? Haven't been there in ages, but it offers some pretty decent rewards so I'll tell you there's a much better likeliness that players are going there because of the rewards than because they actually enjoy the experience.

Look at the huge problem Bliz had (and I think still has) with people basically AFK in battlegrounds. Why would people join a battleground if they didn't want to play it? Answer again, rewards. Purple pixels.

It's got pretty much nothing to do with PvP.

"A lot of people don’t like playing FFXI because it’s a completely boring grind-fest. Just reading this sites beginners guide to Vanadiel alone reminds me how much of an arduous bore that game was and how difficult it was just to get started. I don’t know if it’s changed, but when I joined, you couldn’t pick your own server and you couldn’t make more than one character without paying extra. The story was downright juvenile and I one had to grind up twenty levels and go digging around just to find quests that didn’t even give exp! I hardly call those odd reasons for quitting."

From your WoW logo I tend to believe that you are one of the people who joined the MMO bandwagon with the ultimate in Casual MMORPG experiences. WoW changed the mechanics of how MMO's were designed. Back in the day when EQ, UltimaOnline and FFXI were the mainstays, things were more difficult. They were purposely designed as huge timesinks of games.

I came from those days into WoW where I now make my home. However, as WoW drags on with trying to add "new things" to do, the less things there are actually to do in the game. The PvP in WoW was an afterthought and has actually turned the game on its end and forced the developers to design everything based on PvP damage instead of PvE. What was wrong with the old "glass cannon" vs "hardened warrior" mentality? Its gone because all classes need to be able to be countered and survivability is more important than fun in PvE.

In the end, recently I have been wanting to go back to FFXI purely for that "grind" and the "juvenile" storylines that you so hugely dislike. The story in FFXI actually keeps you interested. The grind is actually an entertaining way to spend an evening. It is true that most quests are completely worthless xpwise, but they are actually interesting unlike the "go kill 10 boars" and "go fetch me 15 rocks" quests of other MMOs. What you disdain so much is actually why the game still has 500k subscribers. Yes, the game has not matured much past its heyday with its 2nd expansion, but its a constant and its fun. Not to mention the single best aspect of the game ... The fact that things are actually dangerous. Things can kill you whereever you go. Its not the "safe" world of other MMOs where everything is soloable or duoable. The "real" monsters are the ones that require a full party to even be close to survival.