One of the most fun campaigns ever (D&D) was the 'evil campaign' that one of my friends ran. All the PCs had to be evil, and most of them were various sorts of humanoid monsters, although that wasn't strictly required. Everyone was understood to be utterly out for themselves and there were no restrictions on how that could be expressed. The only limitation was, you started at level 1 and you had a boss, and he had a boss, etc. Failing to achieve assigned goals was generally punished harshly, regardless of whether or not it was 'your fault', so screwing around was a fairly hazardous pastime. Various arrangements arose over time as the game progressed, they all tended to increase the value of cooperation. One group of PCs banded together to avenge any attack on their members, another group all placed themselves under the protection of the most obviously powerful and effective boss they could find, and then do anything to make his career advance, etc.
It was a pretty amusing game, though the average lifespan of PCs was generally brutally short. lol. Still, a few characters managed to advance to decent levels, as I recall (this was all played under 2e IIRC, so the advancement rules were fairly loose, but involved a lot of "get 200xp if you do this evil thing").
The point being, PVP doesn't HAVE to ruin a campaign, it just has to be designed to allow for it!