I think there should be a move towards more visceral, less "insta-kill" knifing. I think Halo: Reach started a good trend by making it so that if you knife someone in the back you get a death animation that takes a while to perform, leaving you vulnerable whilst you do it.
In my ideal system, I would have this kind of kill from behind, whereas if you attack with a knife in front the other player has a chance to defend, by pressing their melee button at the same time (kind of like defending against the dogs in CoD). You could then enter a struggle, and if the attacker wins he gets the kill, if he loses he gets shoved off and they have to start again. In this circumstance, there is still a lengthy animation, leaving both players vulnerable to being shot. In these circumstances, I think people would stick to close range firearms more and go for the knife more for the "cool factor" or the prestige once in a while.