Perhaps my server is just not as populous as some of yours, but from what I've seen of these hunts, it's gotten people out and exploring the world again. Pre-hunt, most high-level players were more like to stick around Rev's Toll waiting for queues to pop or god knows what, but now they are out and about. I figure that the novelty of the hunt will wear off soon, and you will see people gradually start to drift back to the more traditional content, but I don't see it as some world-ending blunder. Once people started to get more organized, we have people forming parties and linkshells, bridging free companies, and interacting with each other far more often than I did before. Occasionally there are trolls that pull early or ragers that scream about what's fair or not, but most of the time, we are willing to be considerate of others.
As for the gripes about how easy it is to get gear, maybe they do need to tweak some things, but it will always be the case that with patches and updates, "green is the new purple." Sorry that you feel it cheapens the game for you, but you can't expect the developers to allow the achievement gap between casual gamers and hardcore raiders to widen over time. Most of their income is going to come from the subscriptions of people who may not be skilled enough to complete the newest content within the first few months and reap the rewards of those raids.
As for the OP's assertion that most of his FC had quit, and that he was soon to follow; am I to understand that because other people have a new toy to play with, that you yourselves can't just play on your own? I thought the point of having FCs with static raid groups was that you could play through high level content without the worry of pugging with FATE-tanks and blizz-mages, or waiting on long queues. Can't you queue for dungeons with people from your FC? If the numbers in your FC are lacking for this, recruit, or join a new one with like-minded people. It seems silly to quit a game because of what other players are choosing to pursue.