Notice how much harder it gets every expansion to out-dps someone who has better gear than you? Even if you outplay them in every way it can be impossible to perform better than someone that has 10 - 20+ item levels on you.
The stat inflation on gear has progressed to the point where a BiS level 90 can do at least 10 times the dps of a fresh level 90; If I remember correctly this was possible at the very end of Cata and Wotlk but since we are only in the 2nd tier of content this expansion that number will increase significantly.
When the idea of an item squish was announced I didn't support it nor oppose it because quite frankly I didn't care; but after realizing that this ridiculous stat inflation will tarnish one of the few remaining reasons of why I play this game (Recount competition), it would be a real shame "for me" if they didn't implement this. The item squish will mean that gear upgrades won't be as significant (which i'm sure people won't enjoy) and in effect will narrow the range of dps. Despite the inconveniences that may be involved in implementing this and the minor (or massive?) misconception of the player base I think this would be a beneficial change for the game overall.