I think LFR as such was a badly implemented scheme simply designed to had out consolation prizes to people who didn't have the time or commitment to raid regularly. Not that there's anything wrong with such prizes, but a good deal of motivation comes from gear, and from doing a boss you haven't done before.
What percentage of the population got to see Sha of Fear N before killing him in LFR? It's, lorewise, the exact same guy. Killing him is an absolute joke, as it should be in LFR, because it is simply too much to ask 25 casual strangers to coordinate and kill something. When does the feeling of 'hey this is an epic boss, I'm glad I got to kill him' come? When I clear it on heroic? I don't think that'll happen this tier, for me anyway. 0.1% of the population has cleared 16/16 HC so far. If say these raiders have not touched LFR so far (which they most certainly have, but for argument's sake) then one can say they truly got the experience they were meant to. But this is a near non-existent percentage of the populace.
While I'm not one of those who sits on the rooftops screaming 'CASUALS ARE GETTING WELFARE GEAR' because heck, I'm not very hardcore myself, I do think rewarding the exact same gear visually for LFR, Normal and Heroic causes a lot of people to lose the motivation to push forward. It's the same gear, in a different color. Why bother? Some of you may say 'Well they shouldn't be raiding for gear'. Well the fact is, a lot of people do, and this ruins the whole effort-reward scheme. You put in zero effort and are rewarded with gear that looks pretty damn similar to what you'd get if you put in a LOT more effort. The impetus simply isn't there.
Rather than giving up on the community entirely and just tossing out purples infrequently for no reason, Blizzard should be encouraging people to play together better. You don't need to have LFR. Or if you do have LFR, design it intelligently, make people do different, but equally meaningful tasks, and give them helpful hints and encourage them to do the same. Maybe a points based system, that awards valor based on how many points you get. Completing a raid task (stunning a mob/interrupting a spell/taking a cleave hit) adds points to your tally. It's not a great idea, I admit, but I believe it's a lot better than what we have now, where people can afk for the whole fight, come back, and receive the exact same rewards as someone who topped dps. It's just not healthy for the game.