Your thoughts appear to be based on semi-recent trends which is fair enough to base an opinion on , you're on the right track at least.
However, this isn't a PvP nor PvE problem, this is a player influx problem. New players just aren't coming in to either side in the numbers they once have. What ever word of mouth avenues the game has once relied upon, (going back a bit, various linux gaming sites and MMORPG.com) just aren't pulling through anymore. These and new sources need to be heavily reviewed by the dev team and ensure fresh faces are always going to be coming in.