I too am with (what seems to be for now) the majority in saying that the "squish" solution is best. The only problem becomes how to you balance the leveling content and old raids/leveling dungeons. With less of an increase in stats, the lower level dungeons will fall into that category of "skippable" meaning that, because the gear improves at a much slower rate, you can feasibly succeed in a dungeon "tuned" for levels much higher than you would previously. That said, I like the idea and think that it would be a good proving ground to weed out the mature players who understand what is going on and the immature ones who cry "NERF!!".