Why the nerf was needed
Light of Dawn was simply performing too well. The base heal itself was potent, and LoD's interaction with Beacon of Light made it even better. Back when holy paladins only had a couple of heals, Beacon of Light was both simple and predictable. The revised version of BoL interacts with several of our new mechanics, creating situations that holy paladins aren't used to seeing. Every heal from Light of Dawn was being replayed by Beacon, albeit at 50% strength, and that caused LoD to do a massive amount of single-target healing. With LoD being potent enough to top off groupmates by itself, it's clear that spamming Holy Light and then unleashing a powerful LoD was the optimal way to play.
The new healing paradigm is all about triage. If we're not making active choices with our spell and target selection, then something is broken. Don't expect for any strategy that involves "spam this" to last very long. Blizzard's devs have made it clear that they want choice to be an integral part of healing, and we're not going to be deviating from that any time soon. When one method of play is so great that no other methods can compete, you can be certain that either a nerf or a buff is going to occur.
Word of Glory and Light of Dawn both cost us nothing but a few holy power points, but LoD could heal for far more than a single-target Word of Glory ever could. We were able to ignore several of our heals and only favor the cheapest (Holy Light) and the most effective (Light of Dawn) without losing any potency. While I really think the original ToR had a great design and that a short cooldown on LoD would've been the better fit, after hearing the reasoning behind the nerf, I agreed with the decision.
The good news
Not everything that came from the stealth hotfix was gloom and doom. Blizzard's devs let us know that they knew about the interaction between Protector of the Innocent and Light of Dawn with Beacon of Light, and they gave it their blessing. Currently, all healing done with Light of Dawn is replayed through Beacon, as well as the self-heal we receive from Protector of the Innocent. If we cast a single heal on the tank, they see that heal, we see a self-heal from PotI, and the tank then sees half of that self-heal replayed onto them. The interaction directly buffs all of our healing spells when used on targets other than ourselves, and it also grants our Beaconed target more than the 50% of the direct healing we do. Many thought that this interaction wasn't intentional, and that it would be removed. Lucky for us, it was deemed to be balanced, and so that mechanic will stay in place.
The key feature of Light of Dawn interacting with Beacon of Light is that we don't have to choose who we want to heal. When we cast Light of Dawn, we'll be doing great healing to our raid targets, and all of those individual heals collaborate to ensure that the tank gets a sizable heal too. Holy Radiance works in the same way, as it lets us "set it and forget it" and continue to cast other heals. By allowing holy paladins to heal the raid with minimal effort, Blizzard ensured that we won't lose our AoE healing capabilities when situations get rough. We had to trade the overpowered strategy of spamming our shiny flashlight for the stability of knowing that everything else is working as intended.
The Light and How to Swing It: Holy helps holy paladins become the powerful healers we're destined to be. Learn the ropes in Cataclysm 101 for holy paladins, study the new balance between intellect and spirit and learn how to level your new Sunwalker. Tanking is a job, DPS is a craft -- but healing is truly an art.