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I don't know if re-tuning whole dungeons would really be a good idea. The problem with your model is that if you "are late", you can't experience the same content as previous raiders. Let's say we are in the third Age: I would be unable to experience the "good old 25-man Karazhan", even if I want to.
Basically, in my opinion, anything that "remove" content is a bad move. The fact that someone started playing late should not stop him from experiencing the same instances that more experienced raiders.
However, I like the idea to apply the "seasons" principe to PvE. Another way to do this would simple be to "move down one tier" the drop rewards. For example, during the first Age, the items would drop the same as now. During the second age, Heroic instance bosses would drop T4 items, Karazhan would drop T5 items, and SSC/TK would drop T6 items. And so on.
The same can apply to Heroic badges items: just lower the price of older items when a new season appear (a Helm that costed 100 tokens during the First Age would only cost 60 during the second, 30 during the third, etc).
This way, you don't need to nerf the instances anymore (as the average ilevel of players equipment would increase anyway), you don't "remove" content (excepted, maybe, some old loots. But even, too old items could be sold for a faction requirement of whatnot), and you still have the time to develop new instances (be it 5-man or raid instances).
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