Thats half the reason its in. The other half is to remove the uber gear philosophy of FFXI and the like. In FFXI, you were expected to have *the* absolute best gear for your level, or have a hard time grouping (unless you were a bard, like me. Then you only needed enough +mana to be useful). In WoW, that isn't true because of soulbinding. Not only is the supply of uber gear lower, but it makes you really think about the effectiveness of your purchace. Is 1 int worth 1 gold? Probably not. Is 5 int? Yeah, maybe 5 is. You attempt to buy the items that give you maximum benefit per gold, not just anything thats better.
I do see instance loot becoming the next big thing. The big thing in my guild is Scarlet Monestary. The easiest boss drops hypnotic blades 9 times out of 10. High 20s dps, quick speed, int and spirit bonuses. All shaman and most casters want one. For a bonus do the Compendium of the Fallen at the same time for either of 2 very nice shields (1400ac with int and either a spirit or stam bonus). Another boss drops a great axe- ravager. Since the drops are fairly constant, you can farm the instances and come out with the loot you want most. Since its an instance, there's no camping, no lines, and no inflation. A work of genius.