Yes, I really like the Edict idea. Not only does it open up the option for PvP and such, but it also adds a clever, refreshing experience for every game, which forces you to adapt your playstyle given a particular scenario.
It would be cool if you could either have the game randomly generate an "Edict", or choose your favorite ones in custom games. Edicts which you accomplished by working with your "opponent" to achieve and others which worked by denying your opponent from having something could make a really interesting dynamic that forced you to cooperate and compete at the same time.
You said it was very easy to have 1 faction crush another, so for example you could have an Edict that punishes one person for killing the other guy, which encourages both sides to keep a balance with one another throughout the game.
Also, I agree with your conclusion that having co-op just be two different players controlling each side of the board may not be the most inspired idea. Obviously one person controlling both sides is going to make the game infinitely easier unless there's a ton of real-time micromanagement involved, so it sounds like co-op would just be degrading the game experience. Instead, working together with your partner to achieve specific goals (kind of like the Edicts) that aren't available in single-player would make it more feasible in my opinion.
In fact, you could probably just mesh both "co-op" and "pvp" together, and have the "competitive" or "cooperative" aspects of the game be based on what Edicts were manually chosen or randomly rolled.
Thank you for listening to customer feedback once again. This is why I'll always be such a loyal fan to Arcen.