I first would like to say I enjoy both types of heroics. I liked the challenge and difficulty of the old TBC/Cata heroics, which had fatal mechanics and many ways you can wipe, as well as trash that was somewhat challenging but with CC and coordination made trivial. Although these were a lot of fun it got really old the 5th, and the 10th, and the 50th time doing these heroics and having to "try" every time especially when its just for valor, and it got especially terrible when you pugged it. That is why I prefer the easier heroics as they aren't as annoying the 50th time around but there is nothing challenging for smaller groups anymore. I for one was looking forward to challenge dungeons but once I heard they didn't give gear and it was just a timer mode I got sad. Challenge dungeons are just beating the clock, the dungeon itself is easy and I don't care for timers.
My favorite dungeon to this day is still UBRS/LBRS. Not so much because of the difficulty and the large amount of bosses (although that's a nice touch) but because if you wanted to do it quickly and easily you could do it as a 10 man, but if you wanted the challenge you did it as a 5man. This is something I found odd that blizzard has never utilize even though Kara/ZA was so successful, and that is 10man dungeons.
My idea is this, there will still be the current "heroics" difficulty that would drop 463 gear but be just a normal mode difficulty (or name it something else, "Challenger Difficulty" or something). Then there would be a "heroic" mode difficulty which would be the same dungeons but done in 10man with new mechanics, it would be on the same difficulty scale of Magister's Terrace (maybe a bit easier, or could have that LFR buff if you wipe but only in 10m). When you que you would join as a 10 man not at 5man(2 healers/2tanks/6dps) and the bosses would drop 47# blues while the end boss would drop 48# epics (same ilvl as LFR or better). They could all be on 2-4 day lockouts so you can't mass farm them and they could even alternate which are open for that lockout so tanks couldn't only choose Heroic Mech for Suneater lol.
What would be the big difference is that you can do as a 5man as well. You wouldn't be able to solo que for this but it would similar to the way heroic scenarios are now as in if you had a full group you could que (or fly there is blizzard really wants it to be that way). If you choose to do it as a 5man certain mechanics would be remove (tank swaps etc), the health/damage may be lowered a bit (by like 15%ish) but it would still be difficult because you are doing a slightly nerfed 10m in a 5m situation. The bonus for doing it as a 5man is instead of just the end boss dropping epics, every item would be converted to an epic quality and the end boss could drop an extra item or something. These bosses could also give Lesser Coins just because it's an optional way to gear your character and their on a lockout so you can't mass farm them like current heroics.
This would be entirely optional as you can completely skip this and go straight into normal MSV for better gear (because MSV is balanced towards 463 gear) however this would give players something to do that isn't dailies. Since it's just LFR quality gear raiders could probably skip doing LFR every week and instead do this. It would work like the old Kara/ZA use to work as a way to gear up to start raiding by ... raiding but instead of reusing the raids and having to do MSV in LFR/Flex/Normal every week which causes burnout you can instead do dungeons which are very underutilized atm. I mean some of those bosses would be fun as a 10man raid if given retuned and extra mechanics :P
I think dungeons are very underutilized and I think there should be a optional harder version of them but in a 10m setting (like Kara/ZA type of thing) that gave LFR or better quality gear. You can also do the same difficulty as a 5man (like UBRS/LBRS) and are rewarded with more gear for doing so (some mechanics would be removed/changed). They would also be on a ZG style lockout (2-4 days) so you couldn't mass farm them like current heroics.