I can see your point of view - even if I don't necessarily agree that it is that punitive, or should generate a strong enough feeling to be an 'anathema'. However... I agree wholeheartedly with the idea of trading faction relationships against each other, and that the weighting of the system should be far more in favour of player's actions being the driving factor, rather than hours played.
Well to clarify, it's the idea of any kind of negative repercussion for logging off from a game that's anathema to me, it's the principle of offline decay that I object to. Glad we agree on everything else. Something else to think about is the inverse, I'd like to see gameplay mechanics for recovering a hostile rep rather than the promise that if you don't play for two weeks all your sins will be forgiven. This would also have the benefit of allowing the player the choice of whether to recover a hostile reputation.