If they were to add perma-death/player looting to PvP servers, they would have to give everybody a free transfer and guild transfer off the server or I think they would hemorrage subs. I think the market for that kind of experience in WoW is really low, so low that the realm population would be neglegibly small and the idea would collapse.
The players would like the "loot another guy's items" until it happened to themselves. If it applied to items, then only PvP items. you can always go back and farm up a pvp item again. You could have been waiting for a year for a PvE item to drop, you get it, then some guy kills you and he takes that item the next day...I don't think that's not going to swing with the players.