I think there is a very good compromise that would cater to most players.

When the devs build content, they could set the minimum number of players to enter around 3 or 4, and create a system where everything scales depending on the number of people entering. The scaling could modify the number of enemies, their placement and strength, as well as possible drop rates. In the later, people who finish the content with the most players at the higher difficult wouldn't want a small group of people to just as easily get the rewards that they themselves have worked for. While there is a certain amount of luck in drop rates, a full group might get the drop they want in only a few runs, the small group may need multiple more runs through to have a decent chance of seeing the drop.

And then in 2.0, we may be able to see even harder content for groups entering with more than eight people. It would be then where I think an expanded loot table would be appropriate. Just my two gil, but I think a system similar to that would make most happy.