@Blade: You're not playing the game. The Factions are NOT enemies, they are allies. LEGO seems to think it's a competition. Also, the winning 'faction' gets a special update in 2012 just for themselves.
Kids (the majority of the game) will take any opportunity to insult anyone who isn't their faction. This isn't going to help, it's as if LEGO wants to destroy their own game.
Actually, I'm going to have to say that Skrief has a bit of a point here. From my month on LU, I did find a couple of complete jerks that I had to report. And there is already some factional segregation, which could indeed get worse from this.
