The biggest challenge to keeping veteran players and gaining new players in pvp must be the server lag. Cyrodiil was meant for epic and grand alliance vs alliance battles. I'm talking about 300+ people on screen at the same time blowing each other up. But the servers can't handle that at the moment. Every epic keep battle I'm a part off, my skills have a 4 second delay before they go off. That's terrible given that ESO is a game of half seconds. You kill in 2-3 second windows by animation canceling and getting off a 3-4 skill combo as fast a you can.
For veteran players of PVE, PVP gives the most dynamic and replayable content in the game. Most encounters are different and unique. PVP keeps me logging in everyday. But only if the servers are reliable and people don't lag out or get kicked from the servers frequently. I've had many friends quit the game because they got sick of the lag.
I do give the development team props for the work that's already been put in. The lag is much better than a year ago, but there's still a lot of work if they want to get past just functional (sometimes).
PVP is end game in my opinion, so the lag should be prioritized. Maybe upgraded servers so it can handle an increase in demand for the pvp environments?