A few thoughts on this...
I'm a fan of freedom. Always have been. Turning Open into "Open PvE" would only serve to be the exact parallel opposite of what we have now- except it would be PvP players going on about how disadvantaged they are because PvE players "control" Open... not directly, mind you, but by prevalent game mechanics.
Firstly, regarding the modes and player damage, it's already been noted by Frontier devs saying there's a damage threshold mechanic for player/player, which they use in Wings for "friendly fire" to ignore a portion of it. If the code already exists in game, then it means there's not a "significant amount of coding" needed to make such changes. That's one possibility- and probably the most cost-effective solution IF they chose to implement a "PvE-centric" mode where player/player damage is ignored. There's also a significant amount of speculation as to why they "won't" do this, mainly from those who wish to PvP... I have yet to see a PvE player challenge such a mechanic, even for "immersion" purposes... mostly what I see are objections from other players who want to be able to shoot other players.
Secondly, an alternative would be for Frontier to populate Open with active GM's who enforce the rules- much akin to Mobius PvE. I seriously doubt this would ever happen, because it's costly having to employ active moderators 24/7 based on this notion alone. Most other games already do this- but this game wasn't ever intended to be actively patrolled by moderators. They released it with the implication that the players themselves would "moderate", which is a total flop considering many will simply do whatever they can get away with- and there's really nothing others can do to "stop" that. Hell even if we had a significant amount of players fully willing to "bounty hunt" or "police" those who actively PK (grief, gank, whatever you want to call it) what would it actually solve? Do you really think they're going to "tire" of it? That's the type of gameplay they thrive on to begin with- combat with other players. And that's why Open is never going to change- has nothing to do with "meaningful" PvP. (which the term is completely subjective to begin with) That's not a solution to PKing, nor will it ever be.
Open has devolved to a "starve them out" tactic by PvE players because they're simply victims of their own success. They got exactly what they wanted- they made their bed, let them lay in it. Make no changes to Open, but rather make improvements to Private Groups that increase the limits exponentially, give players a simple toggle that disallows friendly fire between players (using the damage threshold noted in my first point) and then there's no major changes needed to the game whatsoever. Mobius can simply BE the Open PvE mode that's needed. No additional menu mode, players in Open can't whinge that they were made "homeless", etc. Let them keep dirtying their sandbox, while others simply go about enjoying their own game as they have been.
Remember, oppressing oppressors makes you an oppressor. There's no two ways about it. Give everyone their own little corner to play in, and if they break their own toys or dirty their corner, then OH WELL.