Ion "Watcher" Hazzikostas saw this thread, and wanted share his thoughts on some of the issues you guys have raised:
We think it's worth noting that many players began their Mists of Pandaria raiding experience with an average item level in the low 460s. Over the course of the past four months, Heroic raiders have seen their average item level climb by as much as 50, while normal mode raid groups that are just getting to Sha of Fear for the first time likely have an average item level that compares to what the cutting-edge guilds had when conquering Heroic Heart of Fear. Getting raid loot along the way has likely felt like a meaningful progression, and the overall damage and healing output of a raid group grows measurably from week to week with each piece of gear looted from a defeated boss. We like that, and we want Throne of Thunder to give players a similar sense of progression.
We could have taken an alternative, more conservative approach, where Throne of Thunder Raid Finder awarded ilvl 496 items and Normal awarded 509 items. A guild that has only done the current normal mode raids, but no Heroics, will then walk into Throne of Thunder with an average item level around 500 (lots of 496 items from Heart of Fear and Terrace, some of them upgraded to 504 with Valor). That doesn't leave much room to grow – it means that players would only be a few percent stronger when facing Lei Shen at the end of the instance than they were facing Jin'rokh at the start. It also means that when raiders run into a roadblock halfway through the raid, there wouldn't be much hope that a bit more gear from the next clear would have a significant impact.
Ultimately, we think that raid progression works better, and is more compelling, when there are meaningful increases in power from gear. The effort of downing a boss for the first time is properly rewarded with loot that is attractive to all members of the raid, and the steady increase in player power over the course of progressing through an instance allows us to scale the challenge accordingly. For example, we can now design Lei Shen around the expectation that the average raid group that reaches him will have an item level of nearly 520. The cutting-edge groups that tear through the zone in the first week or two will be comparatively undergeared when they reach him. Without any other changes on our end, item progression means that the same encounter can pose a stern test to a top guild when 5.2 comes out, while still being doable by the groups that only reach the same encounter a couple of months down the line. For example, Heroic Gara'jal was a brutal test of DPS for raiders who faced him last October, but now he feels like part of a smooth progression for groups that are just graduating from normal modes and beginning Heroics.
We're confident that our planned item levels are not going to skew class balance or degenerate gameplay, and we're monitoring the performance of all classes and specs in the new gear that will be available in 5.2 and going forward. Stat "inflation" was probably most out of control during the Wrath of the Lich King, but that was an issue with how powerful the gear was that was available as the expansion began perhaps more than any other factor. As a point of comparison, the item level 213 warrior set breastplate that was available in Naxxramas gave a level 80 player 2% critical strike chance; the item level 496 warrior set breastplate available in Heart of Fear gives 1.32% critical strike chance. We've learned from the past and carefully left ourselves a lot more room to grow this time around.