Having been someone in a static who accidentally hit need on a piece of loot that I was supposed to hit greed on, I think Lootmaster is a very positive thing. For 7/8 statics filling the last spot through PF it's also a very positive thing. If you are a random joining a 7/8 static with lootmaster enabled I highly doubt they are going to lock you out on any drops that you would normally be able to hit the need button.

There's no point to the "don't join" mentality. Just make sure you clarify the loot rules up front on what you will and will not have a shot at. Then, if they renege on whatever agreement you strike they can be reported. Personally, I think lootmaster is going to become the norm in PF groups, and as long as the party leader is up front with how they intend to distribute loot and sticks to their word, there won't be a problem.