It seems to me that Frontier ventured into a territory they didn't have a lot of experience with: MMO. The way the multiplayer version - open and private groups, were implemented, seems to suggest they wanted to have exactly an open, truly cutthroat galaxy with PVP everywhere and probably small groups for people who would like to play with a relatively small group of friends.
In my opinion, they had a particular vision of PVP in multiplayer mode adding a bit of "spice" and danger to the game and didn't anticipate it might turn into anything else than a bit of friendly competition, players staying in-character and playing a particular role when it comes to PVP. They probably thought people will happily assume a role of "bad guys" or "good guys", want to become part of the story and what not. And I'm saying so because I have seen many games where designers were fairly idealistic and rather naïve in their implementation of PVP. The problem is the same I've seen many times over and over again in other games: the vision developers had seldom is exactly the same as the vision the players have. If the game is truly outstanding and offers amazing gameplay experience, more PVE players will stick to it even if there is PVP. But for all that ED has to offer (and to me it's a very enjoyable experience), it's not always a game easy to love. Considering that PVP implementation is far from perfection in ED, less players will be willing to put up with this. Which resulted in what we see: PVE players sticking to Solo mode or joining PG focusing on PVE, like Mobius.
I think that Frontier itself didn't anticipate the number of players interested in private PVE groups. One thing that seems to suggest that, is lack of built-in tools for managing large number of players. The fact that one person basically singlehandedly manages a group of nearly 20k players (even if the number of players active in that group is smaller) is a miracle. That wouldn't happen if the person who organised the group wasn't extremely committed to the game itself. I think it's time Frontier looked into it even just out of respect for a person who is ensuring such a number of players has an enjoyable experience playing ED. Private groups might have been a good temporary solution, but it is really time for some permanent solutions being implemented. Whether through adding more tools for managing such groups and their rule sets or through adding an Open PVE choice. The latter is, in my opinion, a better option, because: 1. It gives Frontier more control over the direction the game is developing 2. They can not count on players to do their job for them forever 3. It is important from the business point of view to do whatever they can to attract and keep players.
They are planning ED to be further developed over the years and it seems they want to add MMO elements (which I believe will help this great game to be more enjoyable and survive for longer). And yes, it's their game, they can take it into any direction they choose, but it would be wise of them to listen to what their customer base is asking for.
Personally I don't mind PVP when it makes some sense. I don't mind having to avoid human pirates or epic battles in space against other players. I don't mind arena type of gameplay, where I can jump into some battle outfitted ship and test my combat skills. But for most of the time I just want to pop in to the game for an hour or two and have some peace and quiet. I would be happy to interact with other players and become a part of bigger community, but this option now is not available to me and I'd be happy to see Frontier both improve PVP aspects of the gameplay as well as provide an open PVE mode.