Item loot never works. People just bag there items or only wear them in PVE. PVP is fun because of the fear factor and the fact that you can take someone's camp or raid target away. I was horrible at PvP for 2 years, but the challenge of someone being able to come in and kick me out enhanced my experience. Made me want to keep playing.
Item loot would only really work if you could loot everything or dig through there bags for one item. But in the end it's not going to promote a casual player to giving it a try. The more people playing on a pvp server the better...
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