This would be good for consistency but would seriously reduce the devs' choices in itemization (i.e. weapon drops being special low-% treasures) and would reduce the "fun" element in looting a boss. Aren't you excited and eager to see what a boss drops any given week, especially if it's new?

For my part I'd like it if it was more token based. Granted there would be a lot more people bidding on the items but atleast you could predict it in some way by seeing how many could possibly want the e.g. 1h-weapon token and how much dkp they have.

My biggest reason for this is that I usually can't be in every raid, more like 50% and if I'm not there when they kill the boss that I want the loot from I might not get the chance again for another 2 weeks and next time crap drops whereas the time I couldn't be there the item got sharded.

Granted, this would make the rare stuff much less rare and fun to get. With this system you would not be alone with the Talon of Azshara unless yours is the only guild who killed Morogrim on server but I think the benefits weigh more here.

As someone said before, half the fun is seeing the loot. Not sure if I agree acctually. Yes it's ok _before_ you see the loot, you're all exited and "Hope my loot dropped and that I get it !" but when you open loot/loot gets posted and your stuff doesn't drop... That's not as fun.

The reason why Blizzard would want loot to be sharded is to limit progression. It's been discussed on these forums before but TBC pretty much came shipped with everything. Ie. next big instance after Black Temple will come in the next expansion. Since they don't want people to work their way through the content too fast, they've made numerous roadblocks. Overtuned instances (SSC, Gruul Vol1, Magtheridon Vol1?) and attunements being the biggest. But disenchanting loot also hampers your progress (even if it is by a "insignificant" amount).

Overall I'd love a full-token based system, that way I'd probably have everything I wanted from Karazhan.
I don't even want to think how much paladin gear we disenchanted on our first weeks of Karazhan and how much loot was wasted since no one wanted it(hunter mail, subpar casteritems).

I think Blizzard is recognizing this idea partially by adding a 2nd token to all token dropping bosses. It's very unlikely that you'll see tokens for non-set gear such as weapons because rarity and difficulty are what set items apart. You would lose that "pimp factor" if everyone was rocking a Talon of Azshara or Dragonspine Trophy, I think some of the raiding base continues to raid to differentiate their character from the rest of server population. Granted they would still have their fame if they're the only guild pushing endgame content, but such fame would be short lived.
I could also foresee internal conflict over loot if everything was static and guaranteed. I think one of the reasons loot systems work so well is because there is a limited number of interest on particular items each week (imagine loot council with 25 people sending a tell on every item, or even DKP) and the chances of such items dropping keep people coming back week after week.