Until I can see something that sets a level to the tiers I am going to reserve comments about how unbalancing it is.
I can however say, after starting on new servers, gearing strictly from quest items and drops can suck for a new player and auction house pricing for lowbie gear (sub 15) is very over priced compared to what a player in that level range can possibly afford.

In short, player greed is partially responsible for this. I base that on 300-500+ silver for level 7 items in the ah most of the time.