I'm very torn on this issue.
On one hand, you've got devs talking how awesome and rewarding it is to go and try to best monsters that are outside of your ballpark, and then, after you slay them, you get a watered down stick with a unique look and maybe some poison damage or extra bleeding effect or whateverer, because, lolyouwerelowlevel.
I would feel outright cheated, if I were to die fifty times trying to kill something and get "rewarded" with a weapon or armor that's barely better than whatever I have on me at the moment.
On the other hand, I've been recenlty playing Titan Quest new game plus on legendary difficulty, where you basically play again with gear and skill from last playthrough and all loot just becomes better and enemies harder to kill.
I was in a cave, not even a particularly hard one and I looted gear so overpowered, I pretty much beat the rest of the game with it, just throwing away everything else I've found, because stat wise that sword and armor I've got was blowing everything else out of the water so hard, there was no point.
And I don't mean that they were margianlly better, I mean that the absolutely most powerful weapon I could buy in that playthrough had around 50 damage and the sword I picked up had 130 damage. Not to mention the former was a war hammer with very slow attack speed, while the sword was rated very fast. Just no contest there.
So... I fear that if they simply loaded chests in high level areas with absurdly powerful screen clearing weapons, everyone who ends up getting them one way or another would end up playing rest of the game in what could be considered god mode.
This system could possibly break the game for many players IMHO.