Alliance is hostile toward Larion and Horde is hostile toward Muigin.

It's because Alliance members get a quest from Muigin to mess with Larion, and Horde members get a quest from Larion to mess with Muigin.

Oh, and no good comes of killing your particular questgiver's counterpart. Well, unless you don't want the opposite faction to be able to turn in their quests to their guy.

But that's just mean!