That idea, if implemented, would bowb the game up beyond repair.
Elaborate. Why do you think so? Is gear progression -that- important?
I've already covered a lot of cons with gear progression. Content is trivialized, pvp balance is upset, game is turned into farming. Those being the major issues in my opinion.
The pros with horizontal scaling, however, is the contrary. Content isn't trivialized. Just because Denova is released, that doesn't mean Eternity vault will become less difficult. You can still go back to eternity vault and polish your performance on certain boss fights in order to beat old records, or simply play through the instance for fun. Perhaps we have different opinions but raiding ceases to be fun when it's turned into farming.
Gearing up in pvp is never fun. If everyone had equal gear from scratch, we'd see much more balanced games that are reliant on skill.
Did you watch the video? If not, you really should. Taugrim explains the concept in great detail.