LFR is raiding no matter how you try to discount it. The R stands for Raid. It has progression. Basicially all you are doing is finding a way to remove it without physically removing it by stripping it of all reasons to be run. The only delusion is from the players who are trying to dictate what a raid is.
As for toxcicty, I have never seen it in all the times I have run LFR. It seems a minority of examples is being blown up into it happening all the time.