I really hate seeing this debate framed in terms of hardcore vs. casual. As a longtime MMO player, I really feel that these categories don't "stick"--the generalizations people make don't apply, and what people think hardcores or casuals want isn't really what they want.
I want to talk about something else: human nature and fun. I really don't feel like people will have fun with the new raid mechanic, simply because it is human nature for effort to breed a sense of entitlement. When that feeling of entitlement is thwarted, it results in a lot of negative feelings. There's lots of ways it could start, from a small core group inviting puggers and then browbeating them into transferring loot, to watching a perceived noob who was a liability to the raid getting your cherished and wanted item, to arguments over which classes and/or players are entitled to rolls, and many other ways besides. It's negativity waiting to happen.
When faced with this kind of situation, players create their own systems. In other games players frequently design and use their own DKP (a point based loot distribution system, for those who don't know) systems. Guilds then become havens for people who agree to a common loot distribution method and raid schedule... not necessarily friends who enjoy playing with each other--for various reasons it can be too hard to have both. The point is, of course, to restore the idea that effort will be rewarded and to curb some of the negativity mentioned above. As DDO is currently, the problems are exactly the same, however, players have another recourse: run with fewer players to remove the scarcity and increase the effort to reward ratio. From what I understand, most guilds don't even need loot distribution systems because of this option.
Any kind of scarcity that results in players having to create mini-governments to try to cut down on bad feelings is, I think, bad for fun in general. If you had a one in whatever chance of getting a token you could trade in for a raid item of your choice, all of those bad feelings could be avoided and the devs could still set whatever level of scarcity they want to have for raid loot. As many others have pointed out, it seems like an excellent solution unless there are some other obscure design intents we don't know about.
Note that I do not care about math, the average chance of getting raid loot per run, exploits, or how easy or hard raids are or should be. In my opinion, all of the discussion on those topics are just variations on people trying to match up effort with entitlement. But I believe that players shouldn't have to, ultimately. In fact, if the new system were to work exactly the same as proposed, but without allowing players to reassign loot, it would generate fewer negative feelings between players overall--despite giving out less useful raid loot to players! The system as designed only gives you the power to give "your" loot away--which is a very negative presentation! Even simple things, like the fact that DDO doesn't have an "inspect" feature, are incredible at reducing negative player feelings. But these things are often overlooked in discussions like these.
No system that has rare and valuable items ostensibly offered in exchange for extended effort should leave aside the question of human nature in the face of scarcity. In fact, I believe it is the first and MOST important question. How can we get the most people to have fun and reduce any potential hard feelings--from the outset? The math and whatever else can come after.
[I want to add a "don't pigeonhole me" disclaimer here at the end, since currently many posters seem eager to categorize others as either casual or hardcore and dismiss them. I am a semi-casual semi-hardcore gamer--I play almost every day for a few hours, but with a few core friends. We are excellent players but aim for fun over uber. I have only ever raided with 12 people, and I have no raid loot to my name. I am a relatively new DDO player. I have one level 14 with 1450 favor and one level 5 drow. My experience with loot mechanics comes from the lessons learned the hard way in other MMOs--my main concern is not about obtaining raid loot, but on the overall health and fun of the game of DDO for all players.]