Ok, here's my theory on why it got nerfed. It's twofold:
1. The repair bill issue, as stated above. Dodging pretty much all your repair bills is bad for the economy. That said, there are other ways around this particular issue, but then I have another theory as to why it got nerfed.
2. It could've become mandatory for raid progression. How much time do you think is used on wiping? Sometimes it can take quite a while to get killed depending on the boss. How many minutes per raid, hours per week do you think could be saved with the entire raid using this item? Especially during hardcore progression at the start of a patch.
Blizz probably foresaw this becoming an issue and hotfixed it before it did. Yeah, it sucks for those of us who were just using it for a bit of fun, but Blizzard needs to be aware of all the possibilities of these 'fun' items. The players will constantly find new and improved ways to break the game; Blizzard needs to be on top of the game to prevent the rest of the playerbase being negatively affected by this.