I think for the most part Blizz is taking the right approach for gear and pets, but were they miss the mark is in uniqueness.
Take for instance the Blood Elf bandit mask, why is vender trash so coveted by the horde? Well, because it speaks not only to the rarity issue but to the knowledge of the game. Anyone can kill 2000 mob to get a rare drop but the Blood Elf bandit mask was like an Easter egg, it was special for the Horde back it the day it said something (not so much today because everyone knows about it).
Maybe there are things out there that I am unaware of, but nothing beats the feeling of finding something special, and nothing feels worse than finding out that everyone else already has the rare thing you think you found.
For instance if you found a Black jungle maggot that was poor most people would just kill it, but what if a knowledgeable player knew that the Black jungle maggot poor or not was a one in a million find. WOW! Get the picture, I sure wish Blizz would because who really cares if you have a rare spawn of Onyxia if everyone else has one also.
So some things should be rare drops, some should be from Raid, dailies and so forth but some should just be special because a true collector would understand its worth.