Actually that was not why the item squish happened. It's no surprise that Word of Warcraft's code is 10 years old, probably even older. The damage and health numbers are presumably stored as a 32 bit number. No matter how big that magnitude of the number it still takes the same time to process it.
The big problem with the gear was that players' damage was increasing at an exponential rate; the further along the exponential, the steeper the increase. At the end of the last expansion, Mists of Pandaria, damage was in the hundreds of thousands per players. Now for those that don't know a little about computing a 32 bit unsigned number can have numbers just over 4 billion. The problem that Blizzard ran into with WoW is that you want an encounter to last a certain amount of time and you work out the boss damage per second and multiply that the time and by the number of players. For the last tier the bosses health was much greater than the four billion health. What they did was have the boss heal up in several phases to give him more health. This wasn't sustainable in the long term so they did what was called the item squish. The item level has almost nothing to do with it.
These were good consequences to it like the power inflation was less so people in lower gear were not blown up with people in the latest gear. Tanks could cope with players in latent raid gear who didn't output 10 times the damage - WoW has a 5x threat [enmity] modifier on tank abilities. With each tier having four difficulties and the difference currently being twice the damage Blizzard have admitted that they will have to do a squish in the future again.
Blizzard like that something is always an upgrade and that means you have to make the next tier up high to ensure this. FF devs should resist this as much as th4ey can. is it a major problem if last tier is useable in the last. I don't think so. Considering the quest gear is ilevel 55 and we're ending on 130 ( or is it 135) it's fair to be worried about inflation but the actual ilevel number is immaterial really.