Trion is spinning this as the two factions recognizing the need to come together against common foes after having beaten four of the six elemental dragons. This isn't actually new - we saw it in the game's first world event, back in March 2011, and frankly the faction system added so little to the game that I was questioning what purpose it served before launch even happened.
One area that may be kind of screwed up is non-instanced PVP. Residents of PVP servers will be locked out of most of these features - good I suppose if you rolled on that ruleset because you really like it, but bad if you are being left behind for PVE purposes. At least Trion offers free server transfers? There could be some odd quirks in terms of faction spying, trash talking, etc, but some of these are already possible. Trion also recently added a three-way PVP system where players choose to join one of the sides independent of their racial faction alignment, so I suppose they may intend for this system to replace the game's original lore.
As always, tip of the hat to Trion for doing what they think is necessary, rather than allowing a situation they clearly felt needed to be corrected to continue - most developers would not consider doing something this dramatic to a launched game. As long as the two factions are always fighting the same enemies anyway, there is very little value to the two faction system. Since developers don't really have the time to develop completely separate content for their factions, this is a logical alternative.
(Meanwhile, Blizzard is supposedly ramping the Alliance/Horde rivalry back up, other than the detail that the Horde's hated warchief is the final boss of the expansion. The whole Galactic War thing kind of rules out merging the SWTOR factions. I don't know that anyone is going to come scrambling to follow suit in retrofitting their games, but it will be interesting to see whether future developers stop doing two factions simply because that's how WoW did it.)