They have to cater to the PvP side of the game. If they make frost too good in PvE, it will carry over and be even more ridiculous in PvP. The survivability aspect is mostly in regards to PvP as well. Every survivability quirk of frost far outweighs cauterize in PvP.
If they actually buffed frost's damage to match the other two specs in PvE all the time (as in without the coincidence of Arcane losing 4 piece T11 making frost scale as well for a while in Firelands), they would have to counterbalance everything else to keep from every 2400+ rated team being composed of frost mages, which would result in fire/frost/arcane being within marginal percentiles of each other, but probably near the bottom of a complete list of every class in sustained damage.
At the very least, frost is viable enough to go 6/7 heroic without being entirely worthless for the raid, and we will have two specs to choose from in T13 most likely (with frost still being viable for more casual oriented raiding guilds honestly). Sit back and wait for 5.0 to (hopefully) solve everything. Frost has come a long way since being condemned after AQ40 5 years ago, honestly. I'm really happy I could effectively raid as frost for as long as I have in T12.
