In the spirit of making suggestions instead of whining in irc, here we go:
-WAW should get rid of its association level PCs except for MAYBE Warders/Apprentices. PC Watchers should be app only guys who become cybernetic slaves of the Agents. If the WAW is the faction that's meant to strike a balance between the Covenant and Exiles then I don't see why they need to be so large and all encompassing. Make them more 'elite' and exclusive.
-The Covenant "free-form, player-faction" thing clearly isn't catching on. Make the faction more focused/well-defined, have a leadership rank called an "Elder", and give it some more presence within the city itself. Maybe get rid of Lower too? I know EFU loves nostalgia, but I don't think there's anyone still around who appreciates Lower nostalgia.
-Either better encourage Ordinants to kill Exiles who misrepresent the faction's ideals or make it so mutations require DM wanding.
Some more involvement with the Covenant would probably go a long way from the DM end. The Exiles have had a lot of "waves" of pushes from PCs and DMs alike with a number of plots developing focusing on them but on the grand scheme of things the Covenant feels overlooked by most of the PC population.
A band of anarchists in a server rife with anarchy just seems to make things a bit moot feeling. It's hard to call for violence and mayhem and lawlessness when Sanctuary basically has no laws, violence is allowed with DM presence or a Councilor, and things like Theft and even Murder goes unpunished with the current state of the server being very, very lax and the playercount in the summer doldrums.
A lot of people seem to have been drawn to the idea idea of going full on "Whatever it takes to beat the dread, get freaky with it" with the eixles.
A lot of people still draw to the idea of law or corrupt law around the hub and struggling with or against councilors.
But adding chaos to an already chaotic server is just a tough motiviation it seems for folks to want to get into.
... Can we save the world yet?
Lower is crap. The zone is hard to navigate, laggy, so much useless space that have NOTHING there. Either let is finally drain out and expand on it or wash it away and make it a deadly ruin with Chosen and others crazy things to fight, maybe add QUEST there and move the lowbie stuff away. Shuffle the Covenant into Upper or some other area more relevant to the setting, so interaction with the server can go beyond In-Between pvp? I agree with KOP that promotions and a more defined goals (if only it was not all ooze based, it might attract MORE players) and some sort of leadership / promotion system. Faction armors or some way to look similar (dyes?) might be cool too. I haven't played since there was a supposed minor buff in perks but before that it was REALLY lacking in anything appealing to drag a player away from everyone into the pits of Lower.