The first is the Cult of the Environment.
This cult began with pretty sensible ideas such as not dumping toxic waste into water supplies or not hunting to extinction necessary species such as those we eat. However the passage of time has turned this highly positive set of goals into a destructive cult. Ironically the cult will talk endlessly about sustainability and attacks any human influence in nature, but it fails to define sustainability (is it using less? How much less?) or that ultimately, the world is doomed even if humanity ceases to exist, in fact only through human intervention will anything survive the inevitable melting of the planet when the sun goes red.
Members of this cult should not be confused with environmentalists who have retained their sensible roots.
The other is the Cult of the Economy.
This cult also began with intelligent ideas: higher production means greater happiness and chances of survival for a civilization. A rather simple example of the value of a strong economy (as measured by GDP) is war. If you have no factories and you suddenly need tanks, you're in trouble. If you have car factories, it won't be simple, but you can retool them and retrain workers to build tanks, in addition to already having supply chains for steel, rubber, oil, etc. Unfortunately somewhere along the line people forgot the point of the economy and started to worship it as an end in itself. Even worse, they may act directly against the point of the economy, encouraging factories to move to other nations based on the illusion that they will produce cheaper goods for their own nation. Some sink even lower and see nothing but their own money and cannot even see the economy anymore.
Members of this cult should not be confused with businesspeople.
These two cults fight on any front they can. Some go so far as to pretend that GDP exists in a video game. Pretend might not be the right word. Perhaps there is a measurable GDP in a game. It would deal in material production: gear, ore, herbs, gold, all that sort of thing. More means a higher GDP. With this in mind the new badges and easily accessible loot will increase the GDP. But you say: "they didn't earn any of it!" Wrong. Give a man paper and pencil and ask him to design a bridge. It will take a while. Give him a computer and ask him to design it. It will take less time. The change was not that he earned it less, but instead that he was more efficient.
Let us fight the cult though by going back to the roots. What is the purpose of the virtual GDP? If we consider all the gear and trade goods and gold to be the products, what are they for? This is not easy to answer. The ultimate goal is presumably fun, seeing as this is a video game. What are some steps along the way? Perhaps the devs want to encourage us to raid for fun, so GDP is a way to facilitate raiding. This seems to fit with Gevlon's thoughts.
PS: if you are claiming that "5-man grinding badge gear is useful as they become more geared so ready to raid" I must ask, "who are you fooling?". Of course there can be raiders filling the last missing spot. A few of the grinders will be new players gearing up. Some PvP-ers will collect some pieces into missing slots. But 95% of the badge gear will never see good use. With crafted BoE, at least half of the effort of the grinders would be useful (not the half that goes into their gear of course)
Unfortunately we don't have very good numbers to work with. 95% is clearly an exaggeration. I suppose I could make up numbers with my own experience, but then I'd have 100% of it being useful and that's even more skewed in the other direction.
What's useful anyway? As we established, it's getting people into raids. Okay. Well that 5% is useful. The rest is 'waste'. Or is it? That 95% is actually not wasted. First off, waste implies some sort of material being lost, when in fact there is no such loss. It is not as if we are burning up our limited oil reserves in order to create badge gear. What will happen with the wasted gear? Perhaps it will end up on a canceled account. This can happen to any gear, not just badge gear, so that waste can hardly be blamed on badges. Perhaps it will end up on a person who just runs heroics. Is that a waste? No, because nothing is lost. In fact, by providing such 'wasted' gear to a player who only does heroics, it provides further progression, encouraging them to play longer, resulting in a longer subscription, and from that more money to design raids. Having raids in the first place is essential to any attempt to encourage raiding.
And as always: only raiders and PvP-ers need gear. Anything else (RP, casual questing...) can be done in blues perfectly. Without the real intent to go raid (I mean spamming guilds with applies) or without the real intent to do serious PvP (creating team, play 20+/week) someone does not need any epics. If he "needs" gear, he is a social and wants the gear to show it to peers.
Why did Sunwell drop gear? It was the final raid and there were no hard modes to do. Any gear from it would be going towards either raids which had already been cleared (which means the new gear was not needed) or leveling in the upcoming expansion (which Gevlon claims needs nothing more than blues).
Gear is a reward. This is apparent simply by the fact that end raids have dropped it. It is not just a tool to get to the next raid. For players who cannot raid, not due to being M&S, but due to RL time contraints, then gear rewards will stop sooner than those of raiders. Since MMOs are founded on virtual reward and social interaction, this would cut non-raiders away from half the game, and as a result just might make WoW fall below the point of being worth their money. At this point the non-raiders would likely leave, starving Blizzard of the massive amounts of money needed to design, test, and maintain raids and servers for them.
If that was too much to read, here's a shorter version: Badge gear is not wasted because no base materials or effort were wasted (oh fine, the half an hour of dev time required to switch all bosses to a different emblem). Attempting to use RL economic rules in a virtual world with effectively no material limits is outright stupid. Just to end on a stupid note:
Talking about badges, "You are payed by an NPC, disregarding the needs of other players. In a BoE economy, the price of different items would depend on the demand and supply generated by players."
Badge loot is actually highly beneficial to other players. If I buy a T7 token (which I did) I will no longer attempt to take a T7 token from a fellow player. This can be applied to any loot. Badge loot is in fact the most selfless of loot, the most regarding of other players. It takes a resource (badges) which is entirely mine and uses it to prevent the need to take another resource (random drops) which would be valuable to others. If I had not bought a badge cloak I'd have taken two more drops from others (or maybe it's more, I've lost track of how many items I've passed to others). It is exactly my regard for others which causes me to spend my own currency in order to be better prepared to help my guild and take less loot from others.
Finally, a fully BoE economy would be terrible. It would encourage gold-buying on a massive scale. It would encourage people to do solo dailies (rather than grouping up for instances) and avoid any potential gold losses (raid wipes). To top it off it would be very rewarding to two groups: raiders who directly acquire the gear and "the facerolling moron, who spend his infinite free time (unaffected by working or learning) on grinding..."