Guild Wars 2 might sell itself as not being a loot-focused game, but let's face it: No one wants to pound on a giant for five straight minutes without getting a new sword. So players were more than a little annoyed when exactly that was happening. After extensive investigation, director Colin Johanson posted to the forums confirming that the team believes it's found the problem and will be fixing it with the large patch later this month.
The short version is that the game has a set of criteria to determine whether or not a player gets credit for killing an enemy and whether or not said player gets loot. Unfortunately, the conditions for getting loot from a target, especially high-health targets like most Champions, were extremely restrictive and could easily result in players deserving of loot winding up empty-handed. The next major patch will correct this issue, with better criteria for determining loot drops and an assured blue drop from any Champion killed.