How could they use it to get neutral to factions they are typically hostile to?
The proposed command lowers reputations. This allows you to drop a faction's rep without killing npcs or taking missions, methods clearly shown to be problematic considering the status of the server. It does not allow you to raise hostile reps to neutral, it does not allow you to become neutral to lawful capital ship patrols, it simply reduces rep cleanly.
I believe it shouldn't have a cost, as it allows reputations to be fixed without trekking across sirius OORPly. For example, it allows an Outcast who only works in liberty to repfix against all hostile factions - gallia, gmg, corsairs etc without having to go out of his zone of influence to kill npcs.