I'll bring out my usual arguments against raising the cap here
1. There are hundreds of games with high levels. Try Sacred, great Diablo-like hack n slash with an awesome community and a max level of 216. Diablo lets you have 99, WoW gives you up to 60, EQ2 up to 70... heck even Oblivion for level 60+ if you build your guy right.
2. To keep the same balance and accessiblity for the 'casual' player (which is the whole point of gw - don't penalise the casual players who have skill but no time) you'd have to effectively double the levelling process if you doubled the cap. Ok, so they've made it a bit faster in Factions, but seriously, I'm already lvl 7 on one of my new chars in 1.5 hours... any faster than that and they might as well give both PvP AND PvE players maxed out chars to start with
3. Guild Wars is a fairly unique idea; items and levels don't matter. They can give slight advantages, sure, but at the end of the day its been tested and proven that things such as Sundering give no more than 3 extra damage (not certain on the number there, may even be too generous

) As a level 20 pve-er you can kill lvl28+ monsters easily IF you have good team work and communication. Some people can even do it solo. Why make it easy to kill them simply coz we're now 12 levels above them..
4. It would lead to even more elitism. It's bad enough if you get to the desert at lvl 19, OMG UR NOT LVL 20 WE DUNT WANT U!. Just imagine if you got there at level 38 instead of 40... you'd never get anywhere
I realise the level cap is pushing people away, its pushed my boyfriend away, but thats because he's one of these people who gets no satisfaction unless he levels up (not saying htats a bad thing, I love the feeling as much as the next person). He can't appreciate the challenge of soloing a hydra and feeling all powerful, NOT because you have an uber maul of death doing the work for you, but because you worked out a build and you ran it well. Or the feeling from henching your way through all the missions and still managing to finish the game... there are a ton of ways to achieve stuff in this game that take thought and skill and reward you with pride. Levelling up takes no skill and certainly gives no pride, simply that 1 second flash of "yay level!"