As any BC-era player could tell you, Shattrath was a busy place, with players getting their tailoring and blacksmithing done in Lower City, loitering around the Scryer and Aldor bank ledges, playing chicken with the elevators, and riffing on Cro Threadstrong's threats to the nearby fruit vendor. Because the Alliance and Horde were both headquartered in the city and there were no faction restrictions on which of the two banks and inns you used, it was pretty common to encounter both friends and enemies as you went about your business (or, just as commonly, sat somewhere and gossiped in guild chat). While we were chatting about this, my friend said something that stuck with me: "It felt like you cared more about players from the opposite faction because you saw them all the time."
The more I thought about it, the more I felt he was right. I knew if my counterparts in Alliance raiding guilds had upgraded their gear, /waved at them a lot, and /pointed and /cheered to the telltale flames in the central part of the city to congratulate them on their Kael kill. In Cataclysm, we find ourselves largely on opposite sides of the world and encounter each other but rarely outside of the entrances to raids or while farming in higher-level zones.
Now obviously, there are technical issues with sticking players of both factions into the same city (Dalaran was famously laggy for most of Wrath of the Lich King), and given the Mists of Pandaria storyline, it doesn't make much sense to encourage interfaction closeness. But still I wonder, would the sense of server community (otherwise hurt by the success of the Dungeon Finder and Raid Finder) benefit from the reintroduction of a popular neutral city?