Normal mode was designed for PUGs (i.e. WoW's LFR difficulty). Established groups are expected to start on Hard mode (which has a separate lockout).
Regardless of what this level of difficulty was designed for, the loot system clearly is not adequate, even if it is supposedly 'working as intended'.
Again, it would be nice for BW Devs to clearly define the loot systems in place today for end-game operations so there is no more confusion or ambiguity on how it should or should not be working. Or if there are bugs/issues with the loot systems in the normal modes, tell us that too and give us an idea of when we will see a resolution.