I'm more of the mind that BH isn't a bad system, it's merely outdated.

If they changed BH to remove the healing boost (so BH5 players heal 15000 through Recuperate like everyone else instead of 22500) and add a 8% damage taken increase per stack of BH (for a 40% damage taken increase at BH5), that would probably make BH less of an issue to deal with in the current form of PvP. If that's still too strong, maybe they lose all BH points when they die instead of just 50%.