Honestly, my first thought was that One Tamriel was a business decision to make a dying game feel more vibrant...
Then I heard Matt Firor boast about the 6 million people that have played ESO... Unfortunately, I think many of the 6 million have come and gone, because of the casual nature of the game.
Then I learned that League of Legends claimed in 2014 that they had 67 million 'active' players, and ESO's number looked tiny in comparison... Now, I'm back to my first thought. There were too many dead zones, so they merged the factions to make the game seem more alive. Simultaneously, they're trying to encourage new players to start the game.