So what was the point of the item squish again when we'll all be at early MoP levels (at least) once again by the end of this expac?
Blizz has explained this before (albeit poorly) and I've explained it here a couple times now, try to follow along.
The item squish is NOT intended to slow down all scaling from here on out. It was simply to collapse the pockets of expansion that occurred at every level cap milestone (60,70,80,85, they didn't include 90 this time around). So instead of going from ilvl 114 at 69 and jumping all the way to 164 at 70, you will stay at pretty much the same level of gear. The real confusing part is they kept the ilvl as it was before, they just adjusted the stat budget. So in the above example, ilvl 114 and 164 actually do have pretty much the same stats.
Another couple of confusing aspects of the squish is they also picked this time to fuck around with the numbers on base stats and how everything scales. HP pools were doubled, armor values are a fraction of what they used to be, etc. If anything, loot scaling is probably larger than it has been in the past, but that has nothing to do with the item squish.
The item squish was a short term solution to 2 problems: The sheer bloat that stats at max level were gaining, and the spikiness of your character's power as you leveled through the old content. It doesn't change how stats will progress during current content, but they will probably keep updating the squish for each expansion, until they think of a better fix.