I do not think you get the problem here, I said not perfect as a understatement, it would be disastrous if ANY of those two scenarios occur. The system you are talking about is going to either cause an even greater rift, or make it so that no one is going to want to run level synched content ever. Of course people in decent gear are going to dominate people in their whities, as anything else would be weird considering that otherwise people would have to have sets for each dungeon to perform well in them. Think of it as that people running level synched run with the same level as the best gear they can have at that point, which is not exactly vendor whities. That is an "unfairness" people can buy and respect, but if people start roflstomping level 22 dungeons with flare and foul spamming, that is going to leave an extremely sour aftertaste for new players, and it is going to cause a huge problem if tanks starts tanking as if they expect the BLM in the party to have foul and flare.
Likewhise, if people are going to be forced to use those abilities to do decent in dungeons or even still not do that much damage, then that too is a problem. Then on the topic that dungeons are still being dominated by players, that does not have with gear primarily to do, it has to do with the fact that most leveling dungeons are, and always were, extremely easy (save for Sunken Temple of Qarn in 2.0, which was regrettably nerfed the very next patch). You want to replace a functioning system with a broken one (well, at least one that has not been added in a non-broken way before).