If 500 people really think that way, it should be the easiest thing in the world to accomplish this.
True enough. However, I believe there is a distinct difference between an OOC player wanting things to be different, and that player RP'ing their character correctly. Just because the player sees a means of improving the atmosphere, doesn't mean that their character IC will tend toward that action. Without OOC interference its almost impossible for this to be accomplished.
I know exactly the ideal way to accomplish it using OOC influences on IC events, but I also know that without some OOC solidarity with some other major players that it simply won't happen. Thus, we have the current situation.
I'm not complaining personally about the situation because I'm still having plenty of fun, but as one of the leaders on Atamara, I do have concerns about whether some of my knights are having fun.
As far as IC concerns, it really only needs the support of about 20 characters for the current state of the game to continue. That could be as few as 10-20 players which can guarantee a lockdown of the CE-Tara federation. Now, if all other players opposed the situation, removal would be trivial but only if they enacted this IC. However, for those players such as those having knights and lords within CE, Tara, or their allies, it doesn't make great IC sense to want it to happen. Even if they would have more fun in the long term by doing so.
Side Note: Just as 10-15 players working to protect it can make it nearly impossible to stop, if you gave me 9 other players working in an OOC manner, I could easily destroy it as well using purely IC means to affect the change outside of those 9 players. The whole point though is that such action explicitly goes against the social contract.
