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With all the data Blizzard can collect and crunch, I have no doubt they know exactly how player raid activity is affected by how much drops they get. Intuitively I suspect people tire of the game the more complete their gear sets is. So while having bosses drop badges may be practical for players it would most likely lead to players being finished with dungeons faster due to fewer items being disenchanted.
I think in general the game is fine as it is. Badgegear and 10-man raid drops are good for filling gaps while 25-man raid drops is where a raider gets the majority of the gear he needs. I think Blizzard has done a better job with balancing reward with effort in PvE than they have with PvP gear.
Personally I like the anticipation of seeing if the items I can use will drop. Sometimes they never do and sometimes they do at once. If I could buy items with some raid currency it would probably end up feeling boring.
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