Naru so cray-cray.
Rares are an integral part of any game; go through any RPG, and you will encounter rares. Even MOBAs and FPS shooters have 'rares' in the sense of excellent items that are prohibitively costly to obtain. Obtaining a rare object give a sense of accomplishment, more tangible than completing a quest or story arc, and often as important as taking out your enemy. They are rewards, earned through effort, combat, time, and more. They are badges of honor, and prestige which makes the player holding them truly feel like a hero or villain of calibre and not just some upstart. In the right hands, they're RP tools, and in all cases lend to how people perceive your character in an RP sense.
Rares are more than just game toys that contribute to your ability to murder, and looking at them that way is exceedingly one-dimensional. Losing rares is thus like losing your rewards. It's a blow to the ego, your self-worth, your RP. But that's because we focus on the loss. What the staff has done and will continue to do is shepherd a shift in thinking. Rares are not the be-all-end-all of a character, and aren't necessary to win (despite loud protests to the contrary). We've introduced more and varied rares in to circulation, more comparable non-rare alternatives, a better system for obtaining oownered items (making them permanent to you, and removing them from the rare-count). The rare crumbling and the roll-back were all our way of trying to get rares out to everyone while still keeping their prestige alive.
The issue is not the rares. The issue is how much we dislike losing. It isn't just a game aspect, it's a perception aspect.
Rare availability, it's role in the world, their power, and permanence will always be a struggle for every game. They are important and integral aspects. In the case of FL it would be naive to think a single, 'simple' solution would 'correct' a system we've consistently adjusted over decades. To address the recent thoughts directly, removing rares would only inspire essays-worth of complaints and would damage the game. Adding a rot-death flag to high level items would intensely reduce interest in those rares, and the areas they're in (thus effectively reducing rares). Reducing rare count would likely also result in backlash from those like rares (everyone) and negatively impact some classes over others.