Changing faction would be cool, but you should need to do something huge in-game.
The theme of redemption and changing sides is so common in KotOR that the inclusion of such an element would certainly be welcomed.
However, there might be design limitations to that and jumping ship multiple times is stupid, so I don't think it's going to happen.
Maybe they could allow it to be done once?
By the way, the name-changing or face changing thing from WoW costs money, in my view, not so much because Blizzard wants to rip off players, but as a real method of discouraging people from doing it multiple times. You could always have an in-game method of doing it, but lifeless people will just do it relatively easily. Make it too hard and it becomes pointless because so few will have access to it. So hit people in their wallets. Quite smart in fact. Those who really want to do it will pay the money, those who can't settle for one end up losing money for nothing.
And if someone comes to me and says ''it's just 5$'', I'm going to rip your head off. Try having a family and maintaining a hobby. 5$ is 5$. Money is money. Don't waste it.