I still think that everyone would very much enjoy a night elf return to it's WC3 like status, as top dogs. If they fail to go with playable 4 factions, - I still feel that the night elves as a race should go neutral, with a group remaining aligned with alliance and a new one aligned to the horde.
Giving night elves playable by both factions. Night elves need to cease their own destiny into their own hands, it makes no sense for a race with such an impressive history and track record to subjugate themselves to a much younger race they should be mentoring, and for them to care that much about them when their are global threats to deal with and when we already have high elves for that purpose. I think they'd stop being lame as well and be a secondary "pretty race" to the horde.
Here's How Lorewise
Make night elves the main heroes of the Orgrimmar conquest, They have the bigger axe to grind against Garrosh, as it's mostly their lands that have been invaded and their forests despoiled, this should incur their wrath and the wrath of Cenarius and Malfurion against Garrosh and his orcs and not necessarily against the whole horde. I expect night elves even angry night elves to be wise enough to tell the difference between Garrosh's actions and not blame the whole horde like angry teenagers. Varian & Vol'jin may be the male stars, but Tyrande and Jaina should be the true stars. Jaina for Theramore, Tyrande for Ashenvale & Stonetalon mountain. Night elves go neutral as a consequence of this. They realize exactly what all this faction conflict is, an old god ploy. However some night elves really do like the humans and some believe that night elves should be leading the humans not leaving them - this group wants to continue to practice magic too where the main body of night elves refuses. This group lends its services to the alliance, their capital is Darnassus.
Moonglade and Nighthaven is revamped bigt ime or an impresssive night elf city built around Nordrassil with nighthaven staying a druid place.
Meanwhile another group of elves are very concerned with the hore. They don't believe the orcs should be left alone and need policing, they insist to Thrall that a night elf contingency remain witht he horde. Think of how the Kok'ron guards remained in Undercity after Wrathgate. Amongst this horde detail of night elves are two kinds. The ones that police and lord it over the orcs, and the other kind that have the wisdom to appreciate that the orcs have a nobility to them which shows under the right leadership - they remember Broxigar of war of the ancients, and Thrall in the 3rd war and feel rather than Orcc police they are there to help the race and ensure no Grom or Garrosh type leader ever gets a hold on that race.
Like Panderan, night elves who meet themselves on assignment with the two factions, consider a face to face more of a duel, to near death.
Night Elven neutral race altho in the open is not focused or aligned to either faction, does secretly keep tabs on both via their kinsmen in either faction. Night elves become playable by both factions but are a neutral force. It's no longer the Cenarion circle this or the cenarion circle that doing all the hyjal stuff, it's the night elves.