When I look at the rewards for completing a battleground, the amount of honor is pitifully small. Compounded with the way you get a measly 25 CP for a bg win (compared to nearly 400 for an rBG win) they just seem useless. The amount of honor you get for killing an enemy player is also non-existent, if I kill a player "in the wild" I get about 0.7 honor, which is nothing.
The top level rewards need to be more exclusive by dint of restricting CP gain, or by boosting honor gain significantly. As you said, who would take the blue honor gear that you need to grind BGs for hours on end for when they could do 5 arenas per week and get an epic item (including weapons and trinkets) for 60 minutes of time every 14 days.