The same thing that happened in the first EQ is happening here with WoW. It's most commonly referred to as the power creep. Most game designers will agree that it's irreversible in an online game. It's not necessarily a bad thing, just expect nonsenical things to appear in the game, like epic gear with an item level of 85 being outclassed by what should be level 62 and 64 gear.
So if Blizzard puts out 3 new raid instances over the next year and has a second expansion ready for next Christmas, the power creep introduced by those 3 instances will make the next expansion's gear look downright ludicrous.
Fortunately - and it sounds wierd saying this - but WoW is passing out of puberty and into the young adult stage, the equivalent of it's mid-to-late 20's. Average life span of these games so far has been about 5-7 years, and WoW is now 2 years old. Within a couple years, Blizzard will probably start planning and designing the sequel to WoW (assuming they'll be staying in the mmo business, and I can't imagine them not doing so). With luck, they'll be able to address the issues of massive power creep and itemization, casual epics, enforced pve so you can pvp, etc.
Edit: Wow, that just came out of nowhere. As for the OP, it's probably b/c of the intimidation factor + cost. It's cheap and it can potentially dissuade an attacker who looks at you and says "wow, he has GM gear, he must be a hardcore pvp'r."
Edited, Dec 19th 2006 9:26am by Riggy