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Looking at the different modes per raid zone seems like it would never work. This would have to be done at the launch of an expansion and not in the middle of one. Item levels are fairly close together as you progress from Kara all the way into Sunwell. The nightmare for Blizzard of adding completely new loot tables to every raid (if not 2 new tables as some have suggested). Itemization is not as easy as everyone makes it out to be. Item stats are constantly getting nerfed and buffed for this reason. It is very tough to balance item level into the game.
The only real benefit I could see Blizzard even considering is added perks for getting content quicker then others. The ideas have been mention with Titles, Mounts, or some sort of Hall of Fame listing. For them to be awarding loot to a select few and then stopping it doesn't make much sense. That would pretty much mean only the top few will get items to allow them to continue their progression. Newly formed guilds of re-rolls or people looking for a fresh start will never get the gear needed to complete that cutting edge content.
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