Remove arena now, or at least with Cataclysm.

Here is a fact, which Pardo is acknowledging with these comments:

Arena is a loss-leader for Blizzard. Yes, it brings people to the game and gets attention,
but it is a HUGE resource suck in that it requires thousands of man hours to balance the game around arena, and is therefore no longer worth supporting from a financial perspective.

The fact is, they probably have looked, and arenas generate a small percentage of subscription revenue, and are no longer financially viable in their current state.

Benefit of arena maintenance - cost of balancing the game and employing a balance team, not to mention all the bs the company has to deal with from Arena players = arenas
really aren't worth the headache.

They could spin it off to a separate product or portion it off by redesigning coefficients, etc. as was mentioned earlier.

As someone who has complained about arenas holding this game hostage for years, the taste of vindication is sweet, indeed!

Bottom Line: Blizzard is married to PVE and PVP is its mistress. When push comes to shove, which it has, the mistress is gonna be out on her a**.