I voted yes, though I know I'm too new here for it to mean much. So I'll just add my point of view. Take it for what it's worth.
I hate pvp for providing conflict. As I've said, I play wow. I rolled on a PVE server because I don't like pvp, however, the game goes through massive changes in gameplay on a regular basis to try to balance things for pvp. My main character is a PVE resto druid. I love healing as a druid. However, I have suffered through some of the worst times as a gimp class because of it. I can't kill a dang thing. That's okay, it's what I rolled. But then, low and behold, druids became powerful in 2v2 arena play, and the nerfs started coming as Blizard started trying to balance things to counter that, hurting our PVE in the process. That's just an example. Every class has gone through major nerfs/revisions to balance things for PVP. WoW also suffers heavily from the point that gear makes so much difference in the game. Well geared players destroy under geared players, irregardless of skill. So the end result was to make gear so easy to get, that it started to mean nothing. If everyone has epics, then no one has epics. So the whole thing just seems to be melting down now with little reason to care about any of it.
The point I want to make is that you pretty much have to chose what kind of game you want to be. You don't seem to have the resources to do both. If you chose PVP, given the type of combat and skill based system you have, you are going to spend a lot of time dealing with complaints from people who are just plain weak in the game because they chose to specialize in crafting and not combat. My character is a Demorian in game. I can't imagine I would have even the slightest chance against any other race in the game. If PS goes that way, then I won't play. Not crying about that, I will just find something else.
So given that I'm asking for PVE based conflict, what I don't really want is faction based conflict. At least nothing that requires hours and hours of faction farming. Factions end up being a good way to do it though, but we should be able to declare our allegiance to a faction and be done with it. We should be able to turn traitor, and have the both sides remember it. Do it too often and you will be hated by everyone. Conflict should have factions attacking factions, or have quests that have you affecting other factions in some meaningful way. Assassinations that stick (i.e. kill the NPC and he's gone from the game... sure, replace him with a new one later). Items that have to be raided and captured. It doesn't always have to be "go get object from dank dungeon crawl for the bazillionth time", though you certainly may want that too. Have raids on each other cities that players can participate in. Yes, that's PVP, but it mixed the PVP with PVE, and it's opt in. If players don't want to fight, they should be able to move out of the way.
Anyway, I voted yes. I could ramble on forever on this, but I'll sum it up with you need conflict to keep things interesting.