I kind-of agree. I think it would only work almost in a kind of war-correspondent journalism way. PS2 isn't ideal from the perspective of an "arena" style competition because of the greenie factor unless, as stated before, there are separate servers used for the competition. The alternative is to go more cinematic and immersive, having actual journalist classes (maybe only playable by SOE staff) and reporting the game progress like a story. EVE Online has been doing it for years and the one thing that makes me a bit sad is the story behind PS2 just seems a bit... flat. Where do troops go to sleep? Where are the bars to blow off steam? Where are the civvies? Why are all the sides fighting when it's a thankless task and nobody can ever properly die? More narrative events and having the outfits part of that narrative would be EPIC in my mind. And hey, how about trying it on the Euro servers first, since we're apparently smaller...
World of Warcrack manages to have social aspects to the game to give that feel of a living world, so why not PS2?