Massively^™

I think, like anything, factions can be done right and done wrong.

In terms of doing it right several of WoW's factions fit the description for me. Factions like the Violet Eye and Tranquillien do it right. Provided you run Kharazan or quest in the Ghostlands you will easily max out the reputation without exerting much effort. This ends up being a good way to provide the player with some additional and guaranteed rewards without just handing them an epic or forcing them to conquer one specific enemy or area for a quest.

Conversely WoW also does many factions incredibly wrong (though the BC factions as a whole aren't that bad to get up). The factions require a constant grind or repetition of content to get up and many of them have limited rewards or benefits. On top of that once the next expansion comes out these reputations become worthless. Why have them so hard to grind up in the first place if they're just going to be meaningless to your character down the line?

In my opinion reputations should either be:
a) Easy to max out and used as a method for guaranteeing worthwhile rewards for time spent (like Violet Eye/Kharazan).
or
b) A lasting choice by the player. Mostly relevant to games with a more open faction system (not RvR). Choosing a reputation (for a simple example a good and evil sides) that persists through the character's life regardless of expansions could really add to the customization of the game and add the opportunity for some good rivalries and conflicts. Meanwhile it leaves the system open for players who don't wish to take sides (in the example remaining neutral should be a viable option). The point is if the choice is lasting and stays with the character through expansions then it can be a worthwhile mechanic.

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I doubt you would mind it if the vendor asked you to complete an enjoyable quest series before selling you the item. The benefit of faction instead of a quest series is the same as that of money and experience: multiple activities can feed into a pool, giving players freedom as to how they fill the pool.

If there were ten vendors in a town; each had a unique, fun quest; and completing any five of the quests unlocked all the vendors, would you recognize that you were building faction? The problem is really that the methods for raising faction are usually tedious, repetitive, no-risk, built around numbers that expose the mechanics, etc.

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