It's hardly a failed theory it's been proven by over a decade of refinement in EVE.
What it does is make the game better for both the PvP players and the PvE players and provides a niche for those in between. At least in my description i linked above , perhaps the OP wouldn't agree - sorry if i'm hijacking your thread...
1: There is a PvE zone where care bears can play and never get attacked if they don't venture out of it. They can build fancy bases without the risk of getting destroyed etc.
2: There is a middle zone - the equivalent of Low Security in Eve. Lets say for arguments sake, you can attack people out in the ocean - ship to ship.
3: There is a PvP only outer area, which has rarer resources in different areas.
The more people you pirate the higher your infamy becomes. High infamy makes it harder for you in the middle region and stops you from entering the PvE area completely.
Area 3 becomes a war zone. Companies vie for control of the lucrative rare resources. You can't just build in PvE because you have to secure these resources if you wan't to keep them.
Area 2 is interesting. Companies may have bases here to raid into area 3. Or they may have posts to trade with the carebears. Or they could be pirate hunters, bounty hunters - good guy type players who try to protect traders etc. Now the PvP players in area three have bases where they can harvest materials you cant get elsewhere. They can monopolise it not letting anyone else have access, or they can trade with area 2. Who in turn trade with area one. This sets up supply and demand.
Example: you live in PvE and build ships which you sell to PvP players who prefer fighting to grinding matts. But to make the best ships you need the materials from different areas, some of which may be in the PvP area. So you trade to get the mats, build the ships and sell them to Pirates for good money. The key thing here is supply chains. Trade routes, the matts have to come from area two or three and the finished ships or tiems come back out. Which provides 2 really important things.
1: Targets carrying high value goods for pirates,
2: Lucrative trade routes and opportunities for companies to specialise in transport, or protection.
This model not only works for everyone, but it actually improves it for everyone. How much better for a PvE player to have a market to sell to. They could choose to support good guys or bad guys, and although they are safe their action could impact what goes on in some distant war. Furthermore their lives are affected by outside factors, prices rise and fall depending on how effectively trade routes are raided, or what prices some company in the north charges for yeti spleens.
Players that like some risk but not 24/7 fighting can sit in the middle , risking their ships and the contents of their holds but not everything.
PvP players can war non stop trying to take areas which actually mean something. And not only that they get an opportunity to kill carebears in trade ships.
White knights can hunt the bad guys , be bounty hunters etc.
It creates meaning and drivers for the game and unexpected things emerge from these kinds of mechanics, events that are much more interesting and unpredictable than the current set up.