And it wouldn't really reward the people who need it the most. If you reward the best 10 players based on their performance, those are the 10 least likely to actually need better gear. Try to run Siege of Orgrimmar now and be one of the top 10 if you only have enough gear to get into the raid. There are people who do heroic raids, who have heroic gear that still step into LFR and they are doing massive amounts of DPS. They would get better gear while not needing it, and the guys who need it will never be able to beat the top guys, because they have it harder to get better gear.
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Whether something is purple or blue doesn't matter. If it's the same item level it has the same stats.