Neutrality in factions started with the Steamwheedle Cartel and only got worse. It seems that once you get to the level cap, most of the intense rivalry between the factions, at least as expressed in the PvE game, peter off to nothing. Almost every faction accepts both Horde and Alliance fighters. In Burning Crusade, they even share the same capital, and it looks like that will be happening again in WoTLK with Dalaran -- despite that fact that, 50 levels earlier, the Horde utterly devastated Dalaran's holdings in Silverpine Forest and Hillsbrad.
The general argument for this change is that at higher levels, most people learn to put aside their differences and fight the greater challenges that threaten to wipe both sides out. My problem with that line of reasoning is that up until the end game, what we're trying to wipe out is each other.
In the Ghostlands, the Night Elves are involved in extensive operations to attack the Blood Elves. In Ashenvale, the Horde is constantly attacking the Night Elves, including setting up spy posts and killing their animal companions. In the southern Barrens, the Dwarves are willing to wipe out the Tauren to set up their excavations. In Lordaeron, the Forsaken have the stated intent of wiping out the alliance, devastating one settlement and even making a preliminary attack against Southshore.