The night is dark and full of terrors...
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have LFR and flex tier N+1 loot be lower ilvl than normal tier N loot. Problem solved.
It's called exponential stat growth. WoW has always been about exponential stat increases rather than linear due to the fact that Blizzard wants you to feel more powerful with each level of gear. It was only a matter of time before the exponential growth started giving us ridiculous rises in the numbers.
Also, Warforged and adding two additional raid difficulties didn't help.
In topic, exponential growth cannot be avoided:
Suppose you're 500 ilvl, and you do 100k dps.
Now you upgrade a couple of pieces, and you get to 510 ilvl and you're dps gets to 120k dps. An increase of 10ilvl increased your dps by 20k (20% increase).
Now you upgrade a couple of pieces, and you get to 520 ilvl. If scaling was linear you would do 140k dps: even if you have upgraded your gear by 10lvl as before, this is a 16% increase, and it's smaller than the first one. To make the upgrade meaningful you want to do upgrade your dps by 20%, it becomes then 144k.
Now you get to 530 ilvl, and using our 10 ilvl = 20% more dps rule we get 172k dps.
Now you get to 540 ilvl, and using our 10 ilvl = 20% more dps rule we get 207k dps, and so on.
If this was the actual formula your dps would be along the lines of 1.20^((ilvl+131.5)/10), and that is exponential.