I wouldn't say they're incompatible, there are many games that have both pvp, and pve successfully, the issue is the implementation of the systems. Right now just certain factors on both sides of it need changes to make either viable apart or together. As stated above there aren't really enough PVE areas and options to draw that kind of crowd, and the assault of pvp in every case tends to hurt even the pve that we do have. I don't really want to see pvp go away, but I wouldn't mind seeing changes, though the pvp'rs and pk'rs are soo scared about that, that we won't be seeing any changes anytime soon. Another thing is the fact that some of the pve things have strange restrictions, things like they're designed for larger groups with no solo or duo options, or are just not viable for play, there's only soo much time you can spend scavving in the wastes before that little red lightning bolt becomes the bane of your existence.
The truth is, full world pvp regulated by nothing more than each individual players morals and whims is incompatible with pretty much anything including fun full world pvp. Most of the successful games out there that are either full pvp or a mix work because they feature things that help limit the abuse players can do to other players. Because as humans given the chance to just waylay on people and not care a fair percentage will do it, some because they were picked on when they were younger, others because it's the only time they can indulge that aspect of their psyche. I'm all for having fun and indulging in a little fantasy, there were times where I sat with unlimited nades in Halo just bombing the hell outta spawn points, but it gets old, because there's no challenge or skill involved. Some people get addicted to that high, now this doesn't translate much into TC here in fallout but that has it's own issues too, with Fast Relog and such.
Basically trying to maintain a game where the players are left completely to their own devices without much of a set goal, will and does lead to chaos and mayhem.