I have a theory. I believe the sort of "evil" or malicious game play-style some players argue that they are being denied in Illyriad would be more easliy accomplished if people tried to execute it in a more well thought-out way, one that fits better into the Illyriad community.
What I'm suggesting is a shift in the mindset of an aggressive PvP city-builder player that allows them to thrive in Illyriad while still pursuing the not-so-warm-and-fuzzy game play they desire. Specifically:
1. Make it fun for your targets as well as your self.
2. Make your losses as glorious and entertaining as your victories.
3. Show people you aren't as aggressive in real life--unless you are!
4. Roleplay! Roleplay! ROLEPLAY!
The first two kind of go hand in hand. If you can find a way to make your victim enjoy the conflict too, they will be less likely to get angry and seek help. For example, say you raid a player or thieve them and get caught. Challenge them to steal it back! Demonstrate that you're not trying to endanger their Illyriad well-being, but looking for some entertainment. A major part of this is selecting targets who have a chance of fighting back; the other part is how well you communicate with those you are attacking.
Likewise, if you do get in too much trouble and are punished for it, savor the fall! View your Illy cities like sand-castles; it's as much fun to knock 'em down as to build 'em up. If you enter into aggressive PvP this way, you will be able to enjoy the outcome no matter who it favors. Maybe write a funny blog about how your helpless attempts to raid legendary cities keep ending with your kingdom in shambles. Or boast in GC about how you just got caught stealing from a member of a major alliance (for the 5th time) and have multiple sieges inbound on your capital.
I feel like number three is the most important. It's far easier to retaliate severely against a player you dislike than against one who you know to be a good person and generally helpful community member. I sincerely believe there is a potential niche in Illyriad for "troublemakers" who are actually liked for the skirmishes they bring--because their form of "trouble" does not involve attacking out of spite or pride but for fun and mischief.
Number four is simply what I believe to be an excellent strategy for carrying out to 1 through 3. Roleplaying can be an excellent "excuse" for entering into combat, makes losing battles and cities more enjoyable, and is enjoyed by Illyriad players in general.
Just a theory, one I have never tested myself, but perhaps one day...