I agree with you 100%. Ever since I heard that it took your Average Ilvl from what was on you and in your bags, I thought it was a stupid idea. Why does it matter what I have in my bags. It should have everything to do with what I have on me, the gear I can use or am using. If I have a piece of gear in my bags that has a higher ilvl than what I am wearing, why would it be in my bags?
I actually got into an argument with a guildie of mine last night because he was under the assumption that no matter what kind of gear you had in your bag, it counted towards your ilvl. Well, he is a paladin, so he can wear any piece of gear. He kept telling me that I could have a plate piece in my bag and it would count towards my ilvl. Well, I am a mage. I cannot wear plate so it does not count towards my ilvl. He was dead set on it being that way. I informed him that I spent 400g (My dungeon group of 5 was trying to go to an instance and I couldnt get in because my ilvl was too low) to figure out, that was not case and that it is only gear that you can wear and since you are a pally, you can wear everything.....
I would go out on a ledge and say that the way they generate the ilvl is probably one of the dumbest mechanics in the game. It should be changed to show just the gear on you. You should not be gimping the group just so that they can try and carry your lazy ass through it.