The only thing Blizzard could do to address realm populations is to start penalizing people on high-pop servers/high-pop factions. Which I would be okay with, but on the other hand, it wouldn't affect me at all.
* Only allow 3 log-ins per week for each account on Horde Illidan
* Charge $25 per toon created on a high-pop faction
* Charge an $10 the first time a toon logs in on a high pop faction, each month
You get the idea.
That's how the problem gets solved. It doesn't get solved with free transfers.
^^ that made me giggle. Bad idea to "penalize" people for playing on a server... you'd lose them as subscribers.
OT: I guess I'm not seeing the issue here. The fact that 1: higher pop servers (usually) have lower AH prices because there are more competitors for mats; 2: There are always players looking for specific raids/PvP situations that you wouldn't find elsewhere; 3: unless it's a PvP realm, there's really no issue here.
The only thing bad about a dead server that I can see is that nothing happens on it... and that's not blizzard's fault. If players want to move to higher population servers, it's because more things are happening on them.