Silhouette recognition is mainly effects average players- people who mainly look at the action on the screen, not so much bars, numbers, etc. Red is dead for the most part, but from far away, you can't tell sometimes, especially if you don't have your plates up. My troll rogue got a lot of PMs from other horde telling me that they thought I was a NE, and that was the point. I had chosen small tusks and NE colors so that confusion would occur, and it did for certain players.

If that isn't enough for you, look into a little game called Darkfall Online. The game allows for Free For All pvp (read: no faction boundaries for language or grouping), but there are some mild indicators for soft factions (you can attack anyone, but the game slightly discourages killing of racial allies, which players can actually choose to ignore). When the game was released, many people relied on silhouette recognition and (sometimes) "red is dead." That is, if you were a wolf man, and you saw a human, you would attack the human. The problem was that sometimes you didn't notice the human was in your alliance (groups of guilds that share a chat channel) or maybe even your party. Large battles where you relied on silhouette recognition could end up with a lot of team frags, so players had to find other ways of identifying enemies (unless they were willing to get close enough to read what guild the other guy was in, at which point it may be too late to avoid a fight).

Eventually this changed so that your allies (chosen by players, not the game devs) were "green" and anyone who declared war on your guild was "red." Team frags still occurred at certain distances for some guilds (ones made up of many different races and mixed allies), but more "racially pure" guilds still relied on silhouette recognition... often to their disadvantage.

Silhouetting is a newbie friendly mechanic, not for advanced players. If you think most players look at enemy buffs, hp, etc, maybe you haven't hit a pug BG in awhile. Try it out and see how often people keep attacking the biggest target, closest player, etc, rather than the squishy healers, gnome rogue that's killing everyone, etc. ;P