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assuming population stays the same with item loot
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That's your problem right there. Wherever itemloot has ever existed, it has significantly reduced the population. I don't see how you can assume that the population stays the same with itemloot when it has been proven time and time again that it doesn't. VZTZ's population more than quadrupled when they removed itemloot. Itemloot has been removed from every single place it has existed, and has never been attempted in any MMORPG since, invariably resulting in more popularity and a healthier PvP environment. I don't see what's so difficult to understand about that.