When we hit 50 on our first class, we had the main story and "fresh" dungeon runs that gave us some sense of variety. I never really liked them to begin with, but when walking around during story quests or waiting in instance queues it was "extra xp", not "the only reasonable xp source". Now, the feeling of a zergfest is much more pronounce.
Agreed, don't blame the mechanic for being there.
It's true (especially for PUG queues for dps), and that (in my opinion) is where the problem lies. I don't think FATEs need to be nerfed, but there needs to be something else because PLD to 50 burned out my desire to FATE significantly.
Edit (char limit): Personally, I tend to avoid most FATEs since I'm not concerned about getting another 50 that fast (would like to get 50mnk for pty mantra and 50war for another tank option, but I at least have PLD to get them gear over time).
