I play on a PvP server and I don't know where you're taking the idea that Horde and Alliance kill each other on sight on such servers; in fact, more often than not we just /hi and go about our business, because we're both following non-competing goals and neither wants to waste time or create animosity. I still like having the option to fight over things out in the world, and I think PvP servers offer a more wholesome and exciting experience, but they're not all about "World PvP" as you describe it at all... People are still mostly doing PvE in the world.
The fact that you can't use most Timeless Isle buffs with the censer reinforces the idea that, while Blizzard encourages World PvP, they acknowledge it should be limited in its ability to disrupt PvE gameplay. So, even if you are ganking PvEers for a purpose, they want you to have a disadvantage; you will only get your reward if you are good enough and if you know how to pick your fights.
Also, try to understand that the item level on PvP gear only takes in consideration the stats that are also useful in PvE, not the PvP power and resilience. So a Grievous staff, for example, has the same stats weights as a 522 Suen-Wo... plus 7745 PvP power! This will make it much better than a 522 exclusively for PvP, probably closer to a 535, but that stat doesn't get counted towards the item level so that people don't use it to inflate their average for LFR queues and similar activities. A 550 PvP item would be considerably better in PvP than upgraded normals.