Your point about applications is way off. Any serious hardcore raiding guild won't care about your general gear/experience, it will look at your RELEVANT experience - maybe you downed LK25 hc top20 or had good parses in a medium/high level gear or achieved something else in game - I know many Gladiator players who passed their trials and heroic bosses when they just first stepped into the instance during their trials.
Your second point is more or less spot on. After running through LFR a potential raider is more likely to continue running only LFR and keep himself busy with other things like pet battles or some other nonsense he might enjoy, thus not promoting normal/heroic raiding. Back in the day the goal was to down heroic bosses because that was everything there was in the game, bar PvP. You either played PVE to progress(no matter normal or heroic) or you PvPd, there simply wasn't any other major activity.