Starting with the Classic World of Warcraft, back in the days, the Reputation System has been trough considerable change.
Firstly, we will try to take a look into the old days, to see how the old factions worked. Secondly, we will talk about the present, and how the reputation system has changed into what is today.
To conclude, since Mists of Pandaria has already been announced, we will also try to speculate on the future... just a little bit.

The past: the old factions

In the early days, when WoW had just been launched, a lot of factions were introduced in the game. Not all of them were present right from the start, but nevertheless there were a lot of them.
We had six PvP based factions, three for Horde and three for Alliance, we had the major city factions: six of them at that time and aside from those we had about 20 of other factions all around the Azeroth.

It was not only the number of different factions that was impressive, but for most of them the path to Exalted was a very difficult one. For us to understand how it was back then when you wanted to get to exalted, I'll try to "review" some of the old factions...

Let's take Wintersaber Trainers as an example. The only way to get to exalted was to farm their repeatable quests. The only problem was that these took a lot of time at level 60. The mobs in Winterspring were tough, and if you wanted to kill the Giants in the south of Witnerspring, usually you had to bring a party.
The current Wintersaber Trainers faction only require 7 days of daily quests to get to exalted, while at level 60 required A LOT more time. Assuming you completed all the three repeatable quests, the reward for your efforts was only 175 reputation points. This way, you had to complete that set of quests at least 240 times to get to exalted. You do the math to see how long would that take...
The really funny part is that all this effort was just for a single mount. That's it. Nothing more. But at level 60, and still at level 70, when you had that mount, you felt really epic.

Another type of faction is the raid faction, everyone is used to these now. Avengers of Hyjal was the latest addition, but we won't talk about them now, we will go way into the past.
The first time when players faced Ragnaros, Hydraxian Waterlords were the ones that helped us out in the Molten Core. You needed them if you wanted to clear the entire raid. You had to follow their quest chain, and you had to be Revered with them to be able to douse the Firelord's runes. After killing a boss in the old MC, you had to destroy a Firelord rune left on the floor by using a vial from the Hydraxian Waterlords. Destroying all the runes in the instance enabled players to summon and fight Majordomo Executus. Defeating him was required before players could try their luck with Ragnaros and his Sons.
It was possible to get to exalted, but it took a lot of MC clears. And in the end you were the proud owner of... nothing! Because the Exalted status had no rewards. The only thing you could get was a ring from the Hydraxian Waterlords quest chain, but that was pretty much useless. Nevertheless, at level 60, someone who was exalted with the Waterlords was a real hero. I honestly never met someone who was exalted with them back in the old days on my realm...

While these are only two random examples of old factions, most of the others were like this too. It was a real challenge for players to reach exalted and the rewards were very few or even non existent. Even so, I remember a lot of people farming those reputations. I know it was a real struggle to farm the texts for the Cenarion Circle... Does anyone remember the trade frenzy for Zandalar Tribe bijous or coins?
Those were some strange days I must say...

The transition and present times

With the launch of Burning Crusade a lot of things changed. The daily quests were introduced and most of the factions took advantage of them. The different kind of paths to exalted were pretty much removed. Most of the new factions gave us only one possibility to get to exalted. Farm something, do the daily quests, run an instance/raid or hand in some items... All in all it became much simpler.
Additionally, most of the factions had their own quartermaster who carried a bunch of rewards for the ones who decided to farm reputation with them. If i had to pick one Burning Crusade faction and say that it was the hardest one to get exalted with, I would honestly say there was not a single difficult one. Time consuming, yes, but nothing difficult. At level 70 the hardest and most challenging factions were still the old ones, the Vanilla WoW factions.
Regardless, these factions were pretty entertaining. You had to keep track of something, to focus on your reputation level, to prioritize certain factions over others... It was pretty interesting. That's when we decided to launch our Reputation Calculator.

When Wrath of the Lich King came, the reputations system was pretty much the same as in the Burning Crusade. A new addition was the Championing or Tabarding, whatever you like to call it. At honored, you were able to buy the faction tabard from its quartermaster. While wearing that tabard, you'd get reputation with that specific faction for slaying mobs in instances.
I guess the Sons of Hodir faction was the hardest one to get exalted with (at least before the amount of reputation you would receive was buffed). Even if it was based mostly on daily quests, you had to do a lot of work.
Also, after the launch of the Argent Tournament, reputation farming for most of the major city factions became pretty trivial.
The only real challenge was the Insane in the Membrane achievement, and funny or not, that was still based on the Classic factions.

Cataclysm made the reputations even easier. Now, except Therazane and Avengers of Hyjal, all the factions can be Championed. You get the tabard and farm random dungeons. When you see the Exalted message you just change the tabard. Before you know it, you are exalted with everyone and you can access their rewards.

What can we expect in the future?

These are only pure speculations, since nothing was officially announced by Blizzard. I don't think we will see any changes for the old factions. Maybe the Centaur factions and the other factions you can't get reputation with anymore are going to be removed completely and be replaced by a simple Feat of Strength.

At BlizzCon 2010 (two years ago) it was announced that a similar achievement like Insane in the Membrane might be introduced. Since we didn't get that in Cataclysm, maybe we will see it in Mists of Pandaria.

I honestly expect, and this is my personal opinion, to see less factions in MoP, 4-5 or something close to that. And maybe not with this expansion, but somewhere in the distant future, I guess the whole reputation system is going to be abandoned/removed.

Either way, I'd like to see the evolution of the reputation system. I can say that with every new expansion and with every new faction things have become easier and easier and in the end all reputations are probably going to be useless.

But there is hope! We might see a revamp of the reputation system, like what has happened with old raids, old talent trees or even the companions. Everything can be improved upon, but sometimes that means it has to be remade from scratch.

Now the questions are:
Is this system really worth another chance?
How do you see the future of factions and the reputation system?
How would YOU improve it?