A pug that has troubles with LR-5 is going to have troubles no matter what loot drops.
Changing the LR-5 loot to level 58 gear ISN'T GOING TO IMPROVE PLAYER PERFORMANCE.
I submit to you that it will actually WORSEN player performance, encouraging people to overgear instead of improving skill and strategy.
But a columi team(which is most of the players who can beat it) could get some upgrade from the boss.
No, it's to let decent players be able to get upgrade.