Yeah they're basically just doing it because if they didn't, eventually it would get to the point where you could just one shot bosses. And if that's the case, you might as well just remove the dungeon from the game.

Tbh though, the fact that they even need to put an item level limit is just a testament to how fast gear is replaced in this game. Normally a regular level cap would be fine, like there is for the lower dungeons, but since we're still only level 50 that's no longer an option, and frankly our gear is way overpowered for level 50 enemies. In other words, if the gear progression was a little slower, item level 120+ gear might have a level 60 requirement on it.