The PVP systems is to create cohesion between players of the same faction and rivalries from the opposing faction.
When PVP is done cross-server it doesn’t make it as personal as having someone from your own server take you on. This will breed not only a better storyline for those who really enjoy it but it will take away from the anonymous feel of killing someone you’ll probably never see again. Now the biggest problem with doing same server PVP is that the queue times are normally incredibly long and one server can be better than another. So what’s the solution to this problem? Queue balance, according to Gabe.
In SWTOR wants to make it so that each person in the battle is equal to about 80% of the fighting capability of the highest level person in the battle. Will this work? Only time and blowing people up will really tell.