There are exceptions of course. Of course some people get carried that really arent that good. But do you think high end raiding guilds would continue to bring a crap player who under performs on every fight?
Even if thats the case, I would rather bring someone with the gear to accomplish the task over someone who thinks they are good with shit LFR gear. A pick up group leader has no information on if that player is good or not unless he/she has raided with them before, and so gear is the only indication of skill no matter how much you want to refute that.