Was this stupid? Yes.
Does if affect progression? Only if a Warrior was chasing rank 14 and went MS spec to get shoulders, GM weapons, then went back to fury.
LC is bad when handled poorly and works fine when handled correctly. This applies to anything in life when decision making is clouded by greed.
BRE and "ass candi" should be giving to warriors who are actively pvping first. Pally / shaman should get Hand of Rag. Hunters who PVP will find large desire for ass candi as well, and should be considered before pally or prot war.
My guild does dkp, and flaws? Yes. Though it is will a bit of LC.
Example, Ony and NEF head were tank prio, but you still had to use dkp in a blind bid. After all tanks had those, physical dps then go after it. Band of accura, I want for TPS tanking, but I was given a drop count to how many we have to see for dps, before a tank can bid. Same with DFT.
Biggest dkp flaw besides class Tier collusion to allow more dkp on multi class items is when you bring a new person in, they get 20 items for min bid, and soon after can be in a position to take a guild first drop from a vet.
So both systems have issues, but you posting this clearly shows you question leadership decision making. Better early than late, so you can make the best decision for your toon.