You've got the crux of the idea, but I think when you are able to see all the items it will be more clear. Fundamentally, PvP gear will have lower stats then PvE gear (expertise excluded), including endurance. So high end PvE gear characters will have bigger health pools, but take more damage. The result of this interaction should get us to point of balance between the gear sets we are shooting for.
This scares me Robby.
I really enjoy your game and hope this doesn't negatively affect it.