I think the biggest problem with PWI is that there is 1 player pool.
So if anyone new actually wanted to play the game they are immediately trying to compete with players that have been here for up to 10 years.
Which would probably make most people simply give up once they realize they have no chance.
tw/xtw are a suppose to be a major weekly event for the game but unless you are caught up on gear and sky levels you simply cannot participate.
My suggestion would be to create tiers that segregates players into different groups for tw/xtw and have their own adjusted prizes.
The easiest way I can think of to do this would be by reputation 299,999 and lower could play against each other enjoy the game, get tw/xtw experience against each other, and not feel be squashed by the max gear toons to the point that they give up on the game.
Then when those players feel like they are ready they can upgrade there reputation and play in the "big leagues".
Obviously this is an over simplified suggestion but I think it would go a long way to retaining new player's.