Well yeah, racials, and balancing them, is a major part of the problem, and this goes for both PvE and PvP. And honestly, what they should do, is just get rid of the racials in their current state, have racials be fun things instead that doesn’t impact the gameplay itself. This way players and guilds could pick the faction they want, without spending a thought on which side has the best racials for progression, and this way players could play the race they want to be the most instead of picking the race that gives them the most benefits / power. Racials have been a problem more or less from the beginning, and sure, removing them would also have a lot to say when it comes to the identity of the races, but currently it does more harm than good. Many times, especially the later years, higher guilds have switched factions to gain an advantage in races etc from the racial abilities, and that is clearly something that then shifts the player base a lot. This is something that in many cases have favored the horde, and it has led to more and more guilds going horde, and also players that are following big guilds because its “cool” to be on the same servers as big known guilds or streamers. And this has all become more or less like an snowball effect where now the horde just have so many advantages over the alliance because of numbers where one factor is that the horde recruitment pool is just vastly larger than it is on alliance, same goes for Mythic+ etc, things like that is way easier to find groups etc for on the horde side, sure, its not impossible or anything on the alliance either, but on the horde it is just way better because of numbers.
There have been many speaking about cross faction gameplay as well, though it never seems like something Blizzard actually wants to do. But in all honestly, the game is at a point where opening for cross faction gameplay would just be very beneficial to the game and its mostly just “lore” preventing this. Keep pvp seperated when it comes to factions, maybe mixxed battlegrounds at most, but for PvE this would be helping a lot. players would be less restricted when choosing faction, people could pick the side they want to be, and the race they want to be, without feeling forced to pick a side and race they don’t really want to be. And I am a good example of just that myself as I am playing Alliance, Alliance is where I feel home, its the place I want to be, and its where I enjoy the game the most, but more or less everyone of my irl friends / ingame friends, are playing horde, it would have been pretty great to be able to play with them even though I am Alliance, but going horde to do that is just a no go for me, as i’ve done it several times to play with them, but being “forced” to go horde, more or less killed the game for me until i went back to the alliance.