Like other people have said, the only way I can see this working is if the offline (or private servers) players are never allowed back onto the main servers. Private servers would probably be split between those who don't allow characters from anywhere except trusted servers (assuming a secure server to server transfer system), or those with large populations of hacked characters.
Though I'd prefer ANET try something like Maple Story's business model (free to play, charge for things that give little or no gameplay benefit, like new skins) when its no longer viable to keep the GW1 servers running under the current payment system.
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