Cross-faction chat is a rather controversial topic. On one hand, the supporters prefer it as it allows for smack-talk, for role playing purposes, and general immersion and social interaction. On the other hand, the opposition believes that removing cross-faction chat keeps the less mature crowd from having a larger audience to talk to, with hypothetical situations such as “it’s bad enough that a group of players will stand around ganking the same guy, now he has to read their racist, homophobic slurs.”
In World of Warcraft, Blizzard has always justified this by racial-barriers. Looking at it from a lore point of view, it doesn’t make sense that the Orc and Human factions could communicate without translators, as why would the Orc teach their children to speak Common, or vice versa? (Don’t mention the Forsaken suddenly forgetting Common and being fluent in Gutterspeak. It’s magic) Bioware talked to TenTonHammer that the plans have changed and cross-faction chat is gone from The Old Republic. Why? Because when Darth Vader announced that he was Luke’s father, the emotional scarring was far worse than having his hand cut off.
We had the big argument that this isn’t like Horde and Alliance, we all speak Galactic Standard so we should just allow it. So we actually did allow it for a little while. The argument against it was that, what happens is people start saying inappropriate things to the other side. That’s just the way it is when you’re on a different side and you gank each other, people tend to say inappropriate things.
I agree. While we’re at it, let’s cut in-faction chat for that same reason. When I was playing The Old Republic, the other players on the test server were unapologetically racist, homophobic, and vulgar. So are some of the people in trade chat in World of Warcraft, and in chat in general on Runescape. In fact, block cross-faction chat won’t stop my random LFG group from telling me I’m a shitty hunter, and that I should hang myself in my living room because I can’t build a proper DPS outfit.
Essentially, if you’re going to block chat: Come up with a real reason. There is a purpose for the ignore function, and that is removing unwanted players from your chat window. Your customer service team should also be inviting active reports for offensive language, and banning offenders. I hate to play the slippery slope card, but what else is Bioware going to remove because a few immature players might utilize it to say bad words?
MMO Fallout 
Of all the things that I dislike about this game, this decision is barely a blip on the radar. I just don’t see what purpose cross-faction chat serves other than smack talk or role-playing smack talk, and I don’t understand how such could be so important as to be a deal breaker.
Well, my interest in the game just tanked. As a roleplayer, I always hated that we could never do a decent cross-faction RP without shenanigans.
At least there’s still Guild Wars 2. And Skyrim. Neither of which will cost me $15/mo.