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.