The item squish will present all kinds of problems related to instance and character scaling and old content. The level numbers also keep increasing and at this rate we'll soon have 150 levels which might sound overwhelming to new players.
How would you feel if Blizzard did a squish on levels. All players would be rolled to level 50 (with relative strength to the mobs remaining) and the new leveling would be:
1 - 30 Kalimdor / Eastern Kingdolms
30 - 35 Outland
35 - 40 Northrend
40 - 45 Cataclysm
45 - 50 Pandaria
50 - 60 Next expansion
This is just an idea, but I think at some point something like this might be implemented. Does it sound like a ridiculous idea?