Relmstein has a post up offering a solution to the problem of useless loot dropping in instances due to the random nature of drops. He's essentially suggesting that items be deeply customisable via the gem socket bonuses, which I guess could work.
Where we part company is whether randomness is in fact desirable. At first glance, probably not. Players find it annoying to have to repeatedly run instances just on the remote hope that the Axe of Ultimate Leetness will drop for them. They like to be able to work towards a goal, getting tokens and knowing that each run is getting them closer to their prize. A nice predictable progression as we have in pvp, where I can calculate with a mathematical certainty how many AB's I need to lose to get my Vindicator's Dreadweave Belt.
Blizzard seems to take this view, with the Badges of Justice dropping from instance bosses. But I think that people have it wrong. WoW is essentially a Skinner Box, dishing out purple goodness to the player for pressing the lever enough times. The eponymous Skinner tried out many different reinforcement schedules on his rats, and found was that the very best way to keep them pressing the levers was to give them random rewards at random intervals.
And lest you think that games players and Skinner's rats have little in common, just step into a casino or play a slot machine. Random rewards at random intervals is how most gambling works. Regular, predictable, rewards just don't work as well.
I think that one of the reasons why WoW has been so phenomenally successful is that it taps into the primitive reward centres in our brains better than any other MMORPG. Blizzard shareholders should probably be opposing any moves towards greater predictability in WoW.