I really believe that when you run a pug you should always look at who is still alive after the fight and give the loot between those people. To me as long as your trying you should have as much of a chance to get the loot as the top dps'er. Besides most of the time the top 4 dps in most OS runs don't need gear anyway their just their to play with their friend.
For all the people that play on Laptops and you start to DC alot I don't feel any pitty for you. I usually don't care for excusses about internet connection and such crap. I would not be raiding if my comp and connection was failing. Cause in the end it makes you look bad as a player.
In the end I say yes you should only give loot to puggers if they are playing good.