First of all yes MANY people still play this game myself included.
I play on a oceanic server in a 300+ guild and at peak times we have atleast 100 people on at a time.
To your point about your server population, it has been stated numerous times that they are addressing it with server transfers and eventually "super servers" which will consolate the smaller servers and increase population.
Finally I am of the opinion that the game is infact not dieing but rather needs some rather important changes which seem to be on the horizon. Therefore my advice to you is roll another charater on a bigger server for now and wait for transfers so that you can eventually move all your toons. But about your pvp concerns i'm sure you would do better on a higher populated server.
QFT. MMOs go through growing pains. In almost every case, I've seen MMOs drop the ball in SOME sort of category. This MMO failed to account for lowered subs after launch. It's inevitable that an MMO will drop subs after a month, two, or even three. Heck, most MMOs slowly lose their subs for a year until they either grow back some or stabilize. This game is no different. It's possible BW had high hopes for the subs and didn't plan on lower pops. But whatever the case may be, fixes are coming. So level some alts, do a lot of crafting, or unsub until those fixes are in place.
People on the boards talk about unsubbing from an MMO like its the end of the world. You can unsub from an MMO to wait out the fixes. Your account and characters will still be here in a year down the road. I have around 3 MMOs I love. When I get bored with one I unsub and resub another. It's not a big deal to unsub while you wait for fixes.