Ok, I've slept on this and.. I dislike it even more. The responses above, as someone pointed out, should prove how bad and idea this is.
People are not going to stick around long term for repetitive war fronts. For long term success for this game, they need to create fun open world - like DAOC _before_ they destroyed realm pride.
So the over populated faction has long queue times. Then give that faction free transfers until the server is balanced (and limit server transfers based on faction balance to a greater degree).