Just coming in here to say NMs dropping relevant gear sounds awful. Did people really enjoy things like camping Valkurm Emperor? I know I didn't.

I think a compromise is possible between keeping casuals relevant and giving raiders the merits they want without making the entire endgame hardcore only. Keep tome ilvl similar to raid content crud so casuals have a shot at some content if they choose to do so. Make raid content crud drop idk, set items that give unique bonuses of some kind? Glows, titles, overall cosmetic changes (IE Trangs set in D2), you could even add set bonuses like the GC gear gave. While you can't give out cool stats like "MP Refresh +20" given how streamlined stats are, you could give out more secondary stats like those sets did so that raiders can still say they're the best. It would be even better if those secondary stat boosts gave you that much of an easier time when new content is released.