There is 0 durability loss from a pvp death. The only wear your equipment gets while pvping is combat durability (which is very small). Therefore you don't really need much gold to enjoy the activity. Raiding, however is very expensive during progression content. Lets not factor in flasks/pots/food and only focus on the durability aspect. One night of progression raiding can cost me 2-400 gold depending on how many attempts we get in. The same time spent pvping will cost me around 10 gold. Now if you want to factor in flasks/pots/food to the raid situation, thats an additional several hundred gold. That could easily be an 800 gold night for me.
Now also factor in he potential for exploiting. A player on one faction can have his friends sign on to characters on the opposite faction simply to be killed over and over for gold. You know as well as I do, if there is potential to exploit in the game, there are many people who will do it. As nice as it might be to get extra gold from PvPing, its working just fine for what it needs to be. I've never had to quit PvPing because I didn't have sufficient gold to repair.