I thoroughly enjoyed, and thus thoroughly miss, the N/H/E loot and the ML steps it had. It was particularly gratifying when the item was a good fit for the next life I had planned. I hit level 12 and I have a shiny new Axe of Adaxus. I hit level 13 and, lo, I have an even better AoA. Ding! I have yet one more sweet new weapon, now for 14. The developers entertain me three times with, what I am assuming is much less than the work of making 3 distinct items. And, the ML steps are precisely what minimized the, "Oh, I just pulled the normal version," letdown if it was something for the future. And, if it were something for the now it worked as well. If I am running an E quest at 2 levels over and get the version powered for the normal level, that is a bummer. Conversely, why have a level 12 run drop ML 14 items? I can wait a life for a new item, but not 2 levels.
In the past, drop rates have been lame. My group has run a whole GH chain and seen 0 named items, but the new rates seem good.
The only thing I dislike about the N/H/E scheme is when I run a whole chain on E, the end rewards are N.
On a separate note, the key word in that definition of entitlement is "given." Rewards are earned while gifts are given. Different actions should earn different rewards.