I still vote to put certain penalties, either longer cooldowns, or a damage penalty in PvP only, leaving everything normal in PvE. I enjoy both aspects of the game, but I do get tired of OP or UP skills making PvP players call nerf and having the skills "fixed" for both PvE and PvP. The best way to balance the game is leave everything in PvE as is, and add PvP penalties and whatnot to the PvP specific instances only.
You did notice that the item in question is avalible to only one faction? For that reason alone it is a poorly thought out idea.