PuGs do normally normal content, so make it drop mostly blues and some epics. HM should drop more epics, but not with 100% chance.
That way ppl get to see content and do normal stuff, have mostly blue gear and few epixes that make them go all gidly inside, and the more hard core players will end up mostly epic.
Blue was the new green of wotlk, make blue be blue again.
Changing the existing gear back to blue won't work, it either is or isn't epic, no use to switch it later. Ppl will just QQ wayyytoo much.