From what I remember, based on conversations in these forums, long queue times only effected specific factions on specific clusters. As far as I could tell, long queues were not a factor on my cluster before the introduction of the merc system. I'd also say, quite confidently, that they were not a factor on other clusters as well.
Add in the fact that we also had a serious server / cluster consolidation at the same time the merc system was introduced and I can't say for a fact that the merc system accomplished as much as everyone claims it did. The server / cluster merger could have accomplished the same thing all by itself, for all we know.
I also agree with Starsong. The players themselves had a viable solution in either rerolling to the other faction or playing already established toons of the other faction that they might have.
If it turned out that that was too much effort for the "vast majority" of the player base, Trion could have introduced a system that allowed you to change factions, either for free or for a fee. This has worked quite well in at least one other game out there and I don't see why it wouldn't have worked here.
And, finally, if one faction is so overwhelmingly outnumbered by the other, why do I find myself being merced 40 to 50% of the time. If the numbers were as skewed as everyone claims, I'd either be getting merced for more often (if I was a member of the overpopulated faction) or far less often (if I was part of the outnumbered faction). Hovering right around half the time tells me that my faction is roughly even with the other faction, meaning there really isn't that huge a disparity between the faction populations on my cluster.