I see this complaint frequently, and it has never made sense.
Uncommon, Rare, and Epic items, denoted by green, blue and purple item names, respectively, are designations for item quality. This wowwiki article explains what item quality is, and how it works:
http://www.wowwiki.com/Item_level
As you see here, item quality is a variable in the item budget. "Epic" is a designation of quality, not rarity, and it signifies a variable in the equation that determines item stat distribution. Blues get more stats per ilvl point than greens, and purples get more than blues. I think most people understand that items improve by tiers, and that the slider for improving items from one tier to the next is item level. The original design mechanism was to use item quality to tier-up, and to tie the item level to the character level required to equip the item. Thus, instead of raid tier 1 being ilvl 66 purple, and raid tier 2 being ilvl 76 purples, the plan was for tier 1 to be ilvl 66 purples and tier 2 to be ilvl 66 orange. Tier 3 would have been ilvl 66 red, and then there was a gold item quality above that. This plan was scrapped before raid itemization was implemented, though the original vanilla leveling itemization did tether item level to the character level that was able to equip it.
The current design is that greens are for quests and random mob drops, blues drop from instance bosses and purples drop from raids. All end-game gear is purple, after an initial max-level blue dungeon tier, and there is a huge amount of stratification among purples, especially late in an expansion.
Compare and contrast:
Heroic Gendarme's Cuirass: http://www.wowhead.com/item=50606
Chestplate of the Risen Soldier: http://www.wowhead.com/item=39239
There is no mistaking these items for equivalents; the ilvl 277 has twice as much of everything and three sockets as well.
The design rationale for all end-game loot being purple is very obvious; item quality and item level are different variables in the same equation. It would be extremely confusing if max-level items were differentiated in terms of both item level and quality, because these are two different variables in the same equation. There was a period in vanilla where high ilvl blues from Zul'Gurub and AQ 20 were better than purples from Molten Core, and a lot of people had trouble figuring out what gear they needed to be using. Since then, everything beyond the initial dungeon tier is purple quality, and the item level variable is the lever that the developers slide to improve gear.
So when were epics epic? Well, there was a period of a couple of months in winter 2005 when many servers had a population of level 60 characters, but guilds had not developed into 40 man raids yet. Dungeons like Scholomance and Stratholme needed to be raided at that point, so it took some time before guilds could recruit 40 people who were interested in raiding and to get them all geared in the blues they needed to down Lucifron, who was a pretty hard check at that point. Between December and around April of 2005, the only epics anybody had were the rare-drop epics from the dungeons, like Headmaster's Charge and Deathstriker. The only people who had these items were ninja looters.
The Dire Maul patch in March 2005 introduced a lot of blue gear in a dungeon capped for five players, and the other dungeons were streamlined for a ten-player cap, which helped people gear out in blues faster. The Dire Maul blues were also better than the blues from other dungeons. This helped a lot of guilds get past Lucifron and Magmadar. Gehennas, Garr, Geddon and Shazzrah were relatively easy by comparison, so a lot of guilds got over the lip in MC during the spring and summer of 2005, and by fall, anyone who did raids had a fair amount of purple gear.
On some servers the population remained too low for raid guilds to really organize, and horde side had the double disadvantage of a smaller population and the lack of Paladins (and their crucial blessing of salvation). So many low population servers had zero horde-side raiding guilds in 2005, and, therefore, the dude with a Deathstriker was the king of Orgrimmar. Even on the Alliance side, the flow of epics could essentially be dictated by one or two guild-masters, since there were few raiders and many servers couldn't support more than a couple of 40-man raid guilds. To the extent "epics were epic" then, it was because the endgame beyond the dungeons was functionally inaccessible to most players.
I don't think anyone will seriously argue that situation was desirable.