This doesn't solve anything. Lack of specifics on drop rates is an issue; I'm sure it's still being determined, but some idea of what it is would be nice.
Thoughts from a pretty serious progression raid leader, guild leader, and maintainer of the EPGP loot system.
1) More RNG for progression. On top of normal randomness in drops, on top of coins, on top of BMAH, we now have Thunderforged. Get a Thunderforged weapon and you're really in a good place. If a guild gets several, it's a significant differentiator.
2) It doesn't solve 25s vs 10s. It just makes 10s annoyed they have even worse potential for bad luck in loot. 25s already have a higher chance of any specific person getting better loot, and it doesn't seem to matter. It isn't enough upward incentive to get guild leadership to try to climb the hill back up to 25s. Going from 10s to 25s, especially without compromising raider quality, is really hard. Where would a 10 man guild wanting to go to 25 even get the people? Only from the destruction of other 10 man guilds at this point; recruiting is hard and somehow adding 18 or so people to have a 25 roster from a 10 is extremely difficult. A slight *chance* for better loot won't really incentivize any individual raider. If you want to use ilvls for it, you *have* to make it guaranteed, so people know they will get better loot if they go to a 25 guild.
3) It's going to be drama when someone takes a non-TF item and then one drops shortly thereafter. People don't like feeling like they screwed up or were screwed by a loot system by taking loot. You also don't want to encourage strategizing about loot so people sandbag and don't, say, take the non-TF version of a trinket because they want to get the first TF version.
4) The loot system is already confusing. So many ilvls already (and "elite" loot already was kind of crappy).
5) More randomness in loot doesn't make farming more interesting. Want more interesting farming? Drop *less* loot. Reduce the ilvl discrepencies so there is more reason to farm old tiers. Keep old raids relevant. Farming isn't the problem; guilds do it, and it keeps people engaged. The problem is invalidating previous tiers' loot.
6) On a selfish level, are my personal chances of getting TF loot *really* better in a 25 man raid? There will be more demand for the loot. In a 10, if something drops, fewer people will want it. Sure, it drops less, but the line is shorter. The numbers have to heavily bias towards 25s for this to make any individual raider more likely to get TF loot in a 25 because the line for the items will be 2.5-3 times longer. Lack of specifics in this post and use of vague, and use of phrases like "somewhat rare" make me suspect that the numbers won't be right.
7) Incentivizing a guild's average ilvl won't incentivize members of the guild. You have to appeal to the selfish lizard part of a person's brain to make them willing to move guilds. They have to *know* there is something for them personally. Likewise, you have to incentivize officers to put in the work to turn a 10 into a 25. This is the opposite; by adding angst and drama, you will get more frustration in 25s than 10s. In 10s, you can say "damn, blizzard, I didn't get the item" -- people blame the rng more. In 25s, they will blame their guild's loot system for giving the item to someone else. That destabilizes guilds.
Seriously, this is monumentally frustrating. This complicates loot for every guild out there, doesn't provide any incentive for guild leadership to try to turn a 10 into a 25, and just adds more rng/drama into progression situations. Such a bad, bad, bad idea.
I've maintained EPGP for years now. I've run my guild for years now. I've probably spent as much or more time thinking about loot and loot systems and progression than just about anyone else. This is startlingly bad. I love to give you guys the benefit of the doubt (I'm basically a Blizzard White Knight) but this is a shockingly, frustratingly bad idea. This fixes nothing and just adds even more drama/frustration into the game.