As I was reading the comments to the previous post, I realized that I had ignored one of my own ideas, that of the Two Views of Loot: Loot As Reward; and Loot as Investment.
My post was entirely from a Loot as Reward perspective, while many of the comments in opposition were from a Loot as Investment perspective. So let's break the problem down and look at it from both perspectives.
Loot As Reward
Under Loot As Reward, PvP loot is far easier to obtain than PvE loot. If we contrasted a new raid guild starting out now against a new start up PvP team, the PvP would get T6/S3 quality gear first. As well, they need to put in far less time and don't have to worry about repair costs.
The quality of reward matters under Loot as Reward. You want the best reward possible, which translates to the best gear. While the new raid guild is earning T4, the new PvP team is earning S3.
And that's unfair to PvE.
Loot As Investment
However, looking at the situation through the Loot as Investment prism reveals an important difference. The raid uses T4 gear to beat T5 content, uses T5 gear to beat T6 content, and will use T6 gear to beat Sunwell. In contrast, a PvP team needs S3 gear to beat S3 teams.
Because of the level playing field, you need to be comparable gear-wise in order to have a fair fight. Otherwise, the best teams will always have a lead on the lower teams, and it will be much harder for a new PvP team to make an impact.
So a hardcore PvPer, one who wants to compete for the Gladiator title or the epic flyer, needs to get S3 as fast as they can.
It's important to note that under Loot as Investment, the pace of PvE rewards doesn't really matter. Victory is measured by different standards: killing bosses, or rating achieved. Unfortunately, both views of loot are valid and deserve to be taken into consideration.
If Loot as Reward did not matter, why make S2 and S3 armor? Blizzard could have stuck everyone in S1 armor and kept the playing field level. They could have tagged armor with a "PvP flag", and only allowed you to wear PvP armor in the arenas, maybe with a heavy debuff if you are wearing a piece of non-PvP armor. But Loot as Reward is important to us, and thus we get new upgrades every season.
I think it's clear from the above analysis that Loot as Reward conflicts with Loot as Investment. Loot as Reward wants a slower, smoother upgrade path. S3 must be earned, and part of that earning is gaining S2 and S1. Loot as Investment wants a faster, spikier upgrade path in order to get everyone to a level playing field.
So how can we resolve this conflict?
My thought is that different areas of the PvP spectrum are dominated by different views. Low-rated teams are more likely to be PvPing for the gear reward, and are not really in contention for any of the higher rewards. In contrast, high-rated teams are competing against each other for titles and ranking, and the armor falls into the category of investment, rather than reward.
There is an inflection point, probably somewhere around 1750 rating, where you cease to look at PvP as a source of epics only, and look at it as a competition for ranking. So I would suggest a solution that took this shift into account.
My solution would be to have two purchase prices. An S3 epic would either require (numbers made up for an example):
1) 1750+ rating and 2000 Arena points
2) The equivalent S2 piece and 1500 Arena points
The idea is break up Arena rewards into the areas that they dominate. Where Loot as Investment dominates, we have a fast progression that must be earned through skill. Where Loot as Reward dominates, we have slower, more natural progression.
The key idea here--which I did not consider in my original post--is that both views of loot are valid, and both need to be considered in any potential solution.