Allow me to walk through some of our thinking, from a couple of angles.
To begin with, Siege of Orgrimmar
LFR loot needs to feel like a meaningful upgrade to people who are currently primarily running Throne of Thunder
LFR. (And yes, contrary to the occasional "but what do LFR players need gear upgrades for, anyway?" argument, it turns out that player power progression is a fairly integral part of the RPG experience for all playstyles, and not one that we consider negotiable.) Now, 5.2 Valor gear is 522, and Heroic Scenario gear is 516, and LFR-only players often have both of these in abundance. For such players, even item level 528 might not feel like a huge step up, but that was pretty much a floor on how low the Siege of Orgrimmar
LFR loot could go.
Next, we want Siege of Orgrimmar
Normal loot to be higher than Heroic Throne of Thunder
loot, for a few reasons. Heroic raiders range from bleeding-edge progression guilds who will be racing for world firsts during the first weeks of the raid, to those who will steadily work their way through the zone over the course of weeks and months. Many players in the latter group will be largely Heroic-geared when Siege of Orgrimmar
comes out, but they won't necessarily be killing many Siege of Orgrimmar
Heroic bosses for a while. The prospect of disenchanting nearly every single drop from Normal in favor of items obtained months ago is not a thrilling one. In addition, that would seriously complicate gear progression and its ability to smooth the difficulty curve over the course of the zone. Since Heroic Thunderforged loot is 549, something in the low 550s felt like the right place for Normal Siege of Orgrimmar
loot, and we chose 553.
That brings us to Flexible mode. It's meant to fill a gap between LFR and Normal. However, Flexible mode requires a pre-formed group to enter, and its mechanics are generally closer to Normal's given the baseline assumption of more coordination and communication among a premade group. Those factors mean that Flexible should be sufficiently rewarding above and beyond LFR, or Flexible raiders may wonder why they're bothering with the additional effort for a measly few item levels. We chose 540 as roughly a midway point between LFR and Normal, and feel it appropriately rewards the added difficulty and organizational requirements as compared to LFR.
For current Heroic raiders, who are the ones most likely to feel obligated to pursue every available means of improving their character's performance, the overwhelming majority of Flexible loot will not be an upgrade compared to their current items. Many Heroic raiders are already sporting average item levels in the mid-540s due to a mix of Valor upgrades and Thunderforged loot. (And yes, while you could upgrade your Flex 540 to make it superior to a 541 or 543, you won't -- if you're a Heroic raider today, you'll be getting 553+ Normal mode loot the moment Siege of Orgrimmar
opens, and upgrading that will be a priority.) Flexible mode will also be gated. Its wings will open at a faster pace than LFR's, but it will still be gated. Again, Heroic raiders will have a significant amount of Normal mode Siege of Orgrimmar
loot by the time most of Flexible is unlocked.
Now, will it be worth it to run Flexible mode as a Heroic raider if you're chasing after a specific amazing trinket, or trying to get your fourth set piece to complete your bonus? Yes, it probably will. But I suspect that the same would have been true if Flexible mode dropped item level 536 loot, or 534, or nearly any reasonable value that would still be an attractive reward to a majority of the playerbase. And that should be a short-term commitment, maybe focused on the specific wing in which your item lies, until you either obtain it or its Normal-mode equivalent. In the long-run, Heroic raiders will be progressing in Heroic mode, and Normal raiders will be progressing in Normal mode.
We don't want to see you feeling obligated to run the same raid two or three times a week any more than you do, and for the most part, we feel that the itemization structure supports that goal. This is a very different structure than, say, Trial of the Crusader in patch 3.2, where clearing all available difficulties was required in order to earn required currency for purchasing set pieces, regardless of your level of progression. We hope that a few weeks into patch 5.4, the only people running Flexible mode will be the ones who genuinely want to do so, and we hope that there will be many of them. The separate lockouts do also offer benefits to many guild raiders who may want to work on achievements separately, or may for the first time be able to hop in an off-night raid with some real-life friends on a different server, without it conflicting with their main raid lockout.
I realize at the end of the day that parts of our design may simply not be ideal for your personal playstyle, and I understand that perspective, but hopefully some of this sheds some light on our thought process and the different considerations involved.