Loot remains one of the prime motivations for running dungeons. We run dungeons to gear up and run raids, which then gear us up for the next tier of raiding. Better loot lets us perform our roles more easily, makes daily questing and grinding easier, and serves as a status symbol of sorts, as well as clogging up my bank with more transmog fodder. (This is not a post about needing another void storage tab, but man, I really do.) And as a result, for as long as there has been loot in World of Warcraft, people have complained about how it dropped, about how it didn't drop, about never getting the drop they wanted and getting the same drop over and over again. I understand this frustration. The current loot system used by LFR and world bosses like Sha of Anger and Galleon often maddens people with its quirks.
But I tell you now, there will never be a perfectly rational loot system that gives you what you want or need and doesn't give you what you already have.