A PVE mode would require total invulnerability from player actions, meaning not only that you would want immunity from incoming player originating weapons fire, but also from being in collision with a player piloted ship. Essentially the equivalent of passive mode in GTA.
The difference is that immersion and role play are a large part of playing Elite. Not caring about where and how you fly would ruin the experience for a lot of people.
I'm not a PVP player. I avoid player conflict zones. But at the same time, if I head for Deciat for example, my heart beats a little faster because I know that the path to Farseer base may be hazardous.
If you play Elite realistically, being aware of threats and taking appropriate measures to protect yourself, (that you should be taking in PVE mode to be fair) then you don't have issues.
This isn't a Git Gud post, but situational awareness and building for survival should be a part of everyone's game anyway.
By splitting the player base over two open modes, you would further reduce the amount of player interaction available to people.
As a none PVP player, I would feel I had to play in PVP mode because I want realism and threat in my game. Every interaction would therefore likely be violent. There would be no situation where I had to wonder what the outcome of the meeting would be, just escape or death every time.
This would ruin Open. As others have said, you have PG or Solo if you are bothered about the risk of a PVP encounter. I want the risk. I want the challenge. Your resolution would damage the game for me while you have other options in how you play.
On top of this, I've only had 2!!!! hostile player encounters despite playing in open since Xbox GPP in late 2015. Unless you spend every minute of your flight time camped out in high risk areas, I do not see the problem.