I also think the alliance should push the forsaken out of Lordaeron. Why? A kingdom with hundreds/thousands of years of history beats a bunch of living dead any day. There's also the fact that the Alliance's inability to retake Lordaeron makes it look weak.
The Alliance should Lordaeron back and push the Undead to EPL. The Forsaken could then take Stratholme or settle somewhere else. Northrend, perhaps?
But whatever Blizzard decide to do with Lordaeron, it's not practical to change things now, so nothing is going to happen until WoW comes to an end.