I did some analysis of faction warfare rewards, LP costs of faction store gear, the results are pretty poopy.

[Comparison]
A purely ISK-bought standard fitting:
STD Minmatar logistics
2X basic shield extended
Basic armor plate
Basic armor repair module
STD mass driver
STD RE
STD active scanner
STD repair tool
Cost: 11,850 ISK

Now the same fitting in pure LP-bought faction store items (republic and federal):
STD Minmatar logistics
2X basic shield extended
Basic armor plate
Basic armor repair module
STD mass driver
STD RE
STD active scanner
STD repair tool
Cost: 200 LP (140 Republic / 60 Federal)

ISK rewards of public contracts on average range from 70-400K ISK depending on your performance; this is not exact, but based on experience. 70k represents absolute laziness (like AFK farming), and 400k represents performing extremely well.

With the ISK rewards you can buy between 6-33 full fits of the STD ISK fitting.

LP rewards of FW contracts on average range from 326-659 LP depending on your standing. This is based on these numbers released by CCP.

With the LP rewards you can buy between 1-3 full fits (depending on standing) of the STD LP fitting.

[Findings]
The crappy ISK rewards you get from sitting in the MCC and doing nothing will still buy you more than the LP you get after grinding through and winning 200 matches and getting level 10 standing.


[But what about the player market?]
The argument could be made that once the player market is out that the LP items will make FW worth it since they could be sold to others for a high price, but most LP items are just lowered-SP-requirement variants, and lower-fitting-cost variants; I don't know how much others would be willing to pay for those, but I'd personally never pay more than twice as much for them. So we established that at lv 10 standing you get 659 LP per win, and you can buy 3 standard LP fits whose ISK-equivalent cost 35,550 ISK (11,850 x 3 fits).

If you spend your 659 LP on the faction store on 3 fits worth of standard gear, and then sell it for ISK to me (I'm only willing to pay 2x the price of regular items), then when you turn that LP into ISK you get 71,100 ISK (35,550 ISK x 2 since I'm willing to pay 2x the price of the regular equivalent).

So IF you have level 10 standing, IF you won the FW battle, and you sell the faction store gear you spent all your winning LP on to me, then you can make about 70k ISK from selling the full product of your victory to me... or you could just AFK-farm in public battles and make perhaps even more ISK, and you wouldn't even need to win.

Players will need to value faction store items several times more than their ISK counterparts just to make FW worth it. If valued 3x as much as regular items then you can make about 100k on player market, if valued 4x value is about 140k, for 5x value 177k, for 6x value 213k. When your standing is level 10, players have to value faction store gear to be worth at least 6x the value of regular gear just to make a ISK comparable to a public contract skirmish's ISK rewards.

[Conclusion]
There is no reason to spend all that time in FW trying to get your standings up; a regular skirmish battle will likely be more profitable (win or lose) then a level 10 standing victory. LP rewards need to be substantially increased, like multiply both wining and losing LP by 8.