According to a new EVE dev blog, the system wasn't exactly broken, but it was underutilized and wasn't always working as intended. As a result, the team took the system apart, examined it thoroughly, and put it back together with a few improvements aimed at making the act of declaring and waging war between corps clearer and easier to understand.
These improvements to War Declaration include modifying how costs are calculated, eliminating automatically retracting wars, and putting a time limit on conflicts. Wars will go on for a week, after which the declarer can choose to pay to prolong it or end it right then and there. An informative War Report will help players understand the forces engaged, losses sustained so far, and the history of a corp's past wars.
The blog ends with a FAQ on the changes culled from the recent Fanfest.