I've been thinking about update 13's use of instanced maps to separate PvE and PvP players in the same zone/district. That should solve most (if not all) of my concerns regarding possible exploits of the conventional PvP-flagging mechanism.
I do think entering/exiting a PvP instance should probably be limited to only certain areas, such as a zone boundary or special cross-over points. To me, one of the fun aspects of "open range" factional PvP is trying to keep the enemy players out of certain areas, or ambushing them as they travel across the zone. If a player can simply switch to PvP from anywhere in a PvE instance, instantly appearing int he same location in the PvP zone, we'd lose that aspect.
I admit that movement powers like flight, super-leap, and teleport make area-denial and ambushes more difficult, but it is still possible, and great fun when you can pull it off.