Results of multi-tasking, wrote one zero too much :)
Let take ToT normal gear ilvl as baseline. 522. Then, SoO LFR - 524, SoO Flex - 528, SoO Normal 535. Voila. That's if we really want Flex mode in the picture, and if we really want non-LFR raiders to feel obliged to run LFR. If LFR would be made more optional, then SoO LFR ilvl could be 516-518. Even though it is 10 ilvl lower than what it is on live, it is only 15 ilvls lower than proposed normal mode gear. On live, this difference (LFR<->Normal) is 25 ilvls, which is quite huge and demotivating.Also, the item squish results not from incompetence, but from a fundamental issue of increasing character stats... how to keep it meaningful over long stretches. There is no perfect solution, no matter how smart you are.
And I don't know how others feel, but raiding ToT feels like complete waste of time. 522 is like new grays at a whim of a patch. So much efforts and resources invested and get pile of crap as reward. I understand that next tier gear should be more powerful, but not so much powerful to make complete trash out of 522 like it is expansion switch.
It's like developers intend "LFR->Flex->Normal->Heroic" progression. 13 ilvls is a significant upgrade for anyone raiding in some specific mode. So jump from 522 in ToT to 535 in SoO would still be meaningful. Why should it be KZ->SWP jump from one tier to next?
However, what is done is done. It is wrong. But "item squish" isn't a solution. Solution lies in finding more competent people to deal with current problems (starting with such problem as changing types of variables...).