We can have and should have non-instanced dungeons.
If you don't like the non-instanced stuff, nothing is stopping you from simply NOT bothering with it.
The loot should also be much better than anything else.

I dare any of you anti-immersion people(Get mad, please) to come up with ONE valid reason as to why non-instanced dungeons cannot co-exist for those who like the content AND, one valid reason as to why the gear should not be better than what you're getting.
Warp from one dungeon to the next all you want; I'm here to play an MMORPG.