|Stole Image from TEN website.|
1) System ownership means something so it makes fighting over systems meaningful - Station lockouts and system upgrades are not huge bonuses to a faction, but they are significant, especially station lockout. Yeah, neutrals can dock so its not a complete lockout, but when you are in a hostile system and you can't dock to get safe from an enemy fleet, you really notice the difference in danger.
2) Being paid to PvP - FW is the only mechanic that pays you directly (in LPs) to destroy enemy ships. For example, being part of a fleet that killed a Gila faction cruiser I received over 6000 LPs. To be fair, payouts are not always that lucrative (it scales with the average market price of the ship) but its a nice bonus and its easy to see how a dedicated PvPer constantly looking for fights could make a living at it when combined with loot drops.
3) FW puts pilots in space, low sec space - Whether its PvE pilots doing plexes or missions or PvP pilots solo or in gangs, they are in low sec space moving around and providing targets for the enemy to try and engage.
4) Alliances in FW allows more organization and security, thus more fleets in space, thus more fights - While I understand the initial rational for not allowing alliances in FW when Empyrean Age was released (i.e. the alliances would dominate and make individuals or small corps untenable in the sov like atmosphere), the result was factions that were often fractured and disorganized and full of mistrust. The alliances allow for larger organizational structures and high level communications to be coordinated, and the smaller entities can form up around those pillars.
5) Ship balancing on frigates and assault ships has revitalized small ship warfare - Since the gate restrictions on most FW plexes force players to operate in ship classes not normally seen in null sec and wormhole space, we see a lot frigates, destroyers, and cruisers. The balances to make Assault Ships more powerful have allowed players like me to consider them for normal low sec PvP where they can go toe to toe with cruisers and sometimes battlecruisers and have a shot at winning. Furthermore, the re-balancing of plain Tech 1 frigates has allowed more diversity for new players (an old players to be sure) to get out there in something other than the Rifter. Merlins and Incursi are common sights in FW low sec now, along with the already popular faction ships like the Dramiel, Navy Comet, Navy Hookbill, and others. Not to mention the Destroyer improvements.
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The upshot is there are thriving communities of players participating in and living in faction warfare in low sec, and that there is a lot of relatively small scale PvP going on as result. I know from personal experience that a casual player has a better chance of finding fights in Faction Warfare on a consistent basis than in many other playstyles.
While there are some problems with some of the mechanics, CCP seems to be going the right direction.