Whatever the system, token drops shouldn't be limited to a list of classes, but rather to a specific role. This is both easier to understand from a silly lore perspective, and provides for fewer wasted drops because I would wager that more guilds closely align in the number of healers:tanks:physical dps:magic dps they bring than they do in the number of specific classes. Like our guild has 4 rogues, 4-5 druids on pretty much every night, and only the fact that we get maybe 1 mage a night on has saved us from having a huge vanquisher imbalance (well, we still had it, but only because it simply never dropped in our early kills). This would also prevent stacking loot on the tanks which while people's initial reaction is that omg we won't be able to progress as fast, it would apply to everyone, and seems like a much better idea. Obviously drop rates would be weighted based on an average raid composition. Could even make it so a given instance spawn with say 10 total tokens was guaranteed to have 2 tanking tokens, 3 healer tokens, 3 phys dps tokens, 2 caster tokens if you killed all the bosses.
Personally I'd be for just removing off set gear in set slots entirely. I don't think it adds anything. If people really want to keep it, I think it should be equivalent to the set gear from the instance before, and there specifically to be used to fill holes where x person never got their t5 chest, so we throw them these off set robes.
I think badge loot, or whatever mechanism there is for essentially catch up gear, should be providing gear of a tier lower than the just released content (ie BT/Hyjal type gear as sunwell comes out, which is about what happened) but specifically not in every slot. I also think the slots that it does encompass should change a bit, so that for instance when sunwell came out a person would be able to have most of a gear set from faction rep stuff, crafted stuff, some t5 level badge stuff, some t6 level badge stuff. I think more mind to what is available through other non drop ways such as crafting and faction rep in creating badge loot would be helpful. Like really, a badge shield and a Shat'ar exalted shield?
I think a goblin shady loot dealer, that could, for a decent chunk of gold and badges and maybe a few unwanted items of a tier higher, acquire some loot you never could get to drop (cough DST). God I would rather give soul cleaver, 1-2 stupid daggers each week and every hunter and rogue off set item other than CVoS to people in exchange for not having to do gruul's lair a year and a half later trying to still get DSTs.
Legendaries, the ultimate status symbols, shouldn't be random drops. Like, we actually got 2 warglaives in our first 6 kills i think, but god is that stupid that other guilds haven't. Almost any system someone can name would be better. Killing the boss in a certain amount of time, prior to the first mega nerf would be fine. Another quest line along the lines of the AQ40 gate opening (not the insane rep and turn-ins part, the stuff I was doing to get
[Fang of Korialstrasz] when they put in a GM healing weapon while I was ranking up for the rank 13 feral gear and went, screw this quest. Something along the lines of Atiesh would work. Or clear every Heroic and Raid instance between resets, be exalted with every meaningful faction, and get a title that says you beat the game and a legendary weapon. Anything that a guild that's at the top level of progression can achieve with a bit of work would be fine.