Or perhaps they would reunite and withdraw from both Horde and Alliance.

I feel there is too much "bad blood" between the factions.

As far as the High Elves are concerned, the Blood Elves damned themselves by giving in to temptation and satiating themselves on the local magical wildlife; which lead them down the dark path towards summoning and imprisoning demons, then draining the magic from them to sustain themselves. The High Elves made do with meditations and self control instead.

The Blood Elves on the other hand, feel they had no choice in the matter. The High Elves (most of them anyway) were safely stationed either in remote areas (like Loch Modan), or in cities well defended by non-Elves (Stormwind and Dalaran primarily), granting the high Elves time to devise their meditations. The Blood Elves however, were alone in a devastated city, with the Amani charging in for the kill. They HAD to do what they could, simply to survive.

Other events have pushed them apart - Garithos; the Night Elves (Alliance members) swarming over Ghostlands; the Forsaken helping to retake Ghostlands; and so on. The Blood Elves accept individual High Elves back "into the fold", and it's fairly likely that the High Elves will do the same. But they maintain a respectful distance, given the faction that each are aligned with.

Oddly enough, I imagine that the Blood Elves are far closer to the Draenei than the High Elves. With the reignition of the Sunwell from M'uru, any religious aspects that surround it will be far far closer to the Draenei's naaru worship than the Alliance's "Church of the Holy Light" - which are very different religions, even if the basic tenets are similar.

There's also the fact that Alleria Windrunner will never, never ally with the Horde (unless Blizzard retcons her dramatically, which they could well do). Y'know how Danath Trollbane hates trolls? Alleria is like that with orcs. After the Second War the High Elves had withdrawn from the Alliance, she didn't have to join the Expedition and go through the Dark Portal - she did it because there were orcs there, and orcs need killin'.

Plus, y'know, her beloved sister is an undead abomination bent upon destroying all life on Azeroth, sheltered in the bosom of the Horde. That kinda sours the deal too.

@caz

That could make sense in the story, but in the mechanics of the game they couldn't really just take a race away from the game. What would all the players that actually like playing as bloodelves do?

I doubt the highelves would ever themselves be a playable race, even though it'd be so easy to introduce them just to roleplaying's sake simply because 90% of the highelves died then 90% of what was left became blood elves. So only 1% of the highelves are still left alive. I don't think that's enough to justify a player population. It's barely large enough to justify a military force.