Frankly, they should have just done what they did with the arena.

LV 30/40 Frontlines: Morale does not apply
LV 50 Frontlines: Morale does apply

Satisfies both the casual and hardcore contingent. Casuals can work their way up to the hardcore gear in a meaningful way (i.e. not just getting gibbed constantly by i90+ PVP players) through 30/40 runs.