From a dev perspective, implementing /guildwar is FAR less risk/effort than doing a red server. The two aren't even comparable.
It would placate a lot of the "red crowd" without bringing the risk of sapping population from P1999 and requiring lots of staff/overhead for a server that would probably cap out at around ~50% of what P1999 pulls.
Don't get me wrong - I'd fucking love a red1999 server - but that is the reality of the situation.
Guildwar was a feature of classic blue server EQ. Maybe people didn't use it on every blue server, but I can vouch that we used it plenty on my blue server and it made the game way more fun. It is a very clean and hands-off way of providing a PvP option.
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