There is zero functional difference between using an over-level alt to farm low-level quests for low-level gear, and using an over-level alt to farm low-level challenges for low-level gear. If we're not prevented from running Heroic Feywild on a L30 for alts, why are we locked out of L10 Cannith Challenges for alts?
The bonus for running under-level is obviously valid, but remove the overlevel lockout, and the -10% per over-level penalty on rewards - just have it be the base 100% reward (just like there's no over-level penalty for named item drop rates).
There's no potential for abuse, there's no reason a L30 would benefit from running low-level challenges since all they yield is low-level items.