Okay, how about bringing the PvE players into everyone else's game with... another group? Bear with me...
You still have the PvP/PvE option, plus a third option (PvAll?) which will assume you don't care which side you're playing. You can be matched with players in either group, and any PvAll players that are in the same instance can engage in combat if desired.
If you're in an instance that contains PvP players, this will act as normal. However, if you're in an instance that contains PvE players, the PvE player will not be able to shoot or be shot by you.
This means all (non-Ironman) players can appear in the PvAll group, increasing the number of players there, while those who want immersion can still stick to PvP, and those who don't want player combat can stick to PvE. The PvP and PvE groups still cannot meet, as explained before, but I think allowing players to choose to appear in both should keep all the advantages of a separate PvE group while also bringing PvE players into the "full" game, if you like.