I feel like those two points are rather contradictory to each other.
First off, "interacting with the community" is not the actual challenge, that's the part that allows to do "only" 10h-12h/day of honor grinding for multiple months instead of 16h/day+.
The real challenge is to make room in your schedule for 10h of WoW every day for 3+ months straight.
People that reduce the ranking system down to "just set up some brackets, lol" have absolutely no idea of the actual mechanics of the system.
Next to that, i don't think taking down a faction leader takes much more skill than R14, heck, your concept of of killing faction leaders actually involves management as well because you need a ton of people for those city raids.
Imagine some Hordies "visiting" Tyrande every few days while a handful of Mages standing at the Portal spawn location to Darnassus, wow, so much skill.
If you want to critize the system for its lack of matchmaking (which is a more than a valid criticism), then at least your proposed idea should have some "checks" on that as well, shouldn't it?
This.
So much of this.
If you'd have to answer some basic question on the functionality of the Vanilla honor system in order to post in this thread, it wouldn't have made it past Page 1.