I'd be 100% behind perma-death or capturing if there was a better guarantee of roster balance. I think there are plenty of players out there who don't care what faction they fight for, and in fact are hesitant about joining either side due to fears of making enemies.
But, when the prof is there, he can make it so people can switch sides, or go from spectator to a side. If it were automated, or the Prof was forced to attend each and every battle, it would be nice anyone who wasn't for or against either faction just joined in spectator mode, then the team commanders took turns picking mercs until the remainder just joined the smaller roster.