The rationale Blizzard gave is along expected lines, and reminds me of the Decursive issue. Basically, since a cornucopia of buffs was theoretically available to raiders, Blizz had to tune boss encounters around having all those consumables on. If the encounters were tuned around few or no consumables, people like Nihilum would blow through all the content in a month, since they'd just flask up and would therefore be "overpowered" from the perspective of raid design. On the other hand, the way it is now has problems too. Since encounters are balanced with an array of flasks and elixirs in mind, they can be very hard if you don't use all those consumables, thus leading to heavy gold requirements for raiding.
I think the solution they've come up with is pretty decent. It basically levels the playing field a certain amount, so that you have a much smaller opportunity to buy more leeway in your raid encounters. This means less gold for raiding. And new encounters are going to be balanced with only a few consumable buffs in mind, so in theory we shouldn't see much of a difference -- we'll be weaker, but so will the bosses. Current content will be rebalanced as necessary, although I imagine at least at first we'll see a stepping up in difficulty, at least those of us who are used to downing flasks and elixirs like so much Gatorade.
Blue post copied after the cut. Oh, and one small ray of sunshine for alchemists: elixirs will now be able to stack with class buffs, so (for instance) an intellect elixir will now be useful, where before it would have not stacked with Arcane Intellect/Brilliance. This will lead to some new recipes being introduced that would previously have been useless. We are also going to be eventually getting some new recipes that might have been overpowered before.