It's not a bad suggestion, but I don't think it would change anything. A big part of doing the content on the other alliances is just to earn more skill points. Whether you get experience or not, whether you would even need it, is not going to matter as long as 2/3rds of the skyshards in the game are in those zones. You can take away all those as well, but then you've dramatically changed the dynamics of what a single character can do. Want to do all crafts? That's all your character will be good for. Want to be able to do two completely different builds? That's all your character will be good for. Right now you can build up such a huge number of skill points, if you want them, that you can open up access to just about every build and craft you could want for your character.

Honestly, my only gripe with the VR1-10 thing is that it's really really awkward. I find myself choosing the options in the quests that are the meaning to the other alliances, or that make the least amount of sense for helping the other alliance, but I still feel like my character is helping enemies. Even the way you end up there is really haphazard. (SPOILER) Cadwell is just like, "Oh, hey, ever wonder what it'd be like if you winded up on a different shore? Let's see." And that's it. I understand it may have been logistically impossible to tune the other alliance areas to an enemy visiting them, but I really expected it to be something like: "You've firmed up your alliance but have realized that the threat requires that all the alliances work together. Now you're visiting your enemies to try and win them over and focus everyone on Molag Bal." Or maybe: "You've defeated Molag Bal but the war still needs to be won. You're now visiting other alliances to subvert their efforts." Or maybe: "You've defeated Molag Bal and won the war in Cyrodiil, now you're visiting your newly acquired territory to explore and quelch harsh feeling/uprisings." Really, just anything other than: "You were EP, but now you're DC! You get to kill your friends! Isn't that cool?!"