There's no endless progression through added weapons and armors like in traditional themepark MMOs. Item power stretches out the limited progression available and rewards players dedicated to a single item class (e.g. leveling all bows).
The current implementation does make a lot of sense, it's just majorly intransparent and unintuitive. I would much rather like to see badges/masteries introduced that are limited to a single item (no item lines) that have fixed, predefined values attached.
1. Item power should be completely scrapped. Item quality (which should be unlocked by crafting upgrades and not reroll spam) will give a flat bonus to any relevant attributes.
2. At certain progression stages, players unlock a mastery for their weapons/armors. Each level of mastery adds a predefined amount of damage/healing/HP/armor/mres to any item in the same progression path.
As of right now, item power decays significantly with tiers. Going from T4 to T5 leaves you with about 15% more item power, going to T6 gives an extra 12%, T7 slows down to 10%.
Reason being the exponential nature of the formula. The more item power you have, the greater the impact is.
This renders the system to be completely opaque to users. Going from 1400 to 1500 in item power does not mean the same than going from 1500 to 1600. 3 charges of Slit Throat would return the following damage depending on item power:
1400 -> 2020
1500 -> 2204
1600 -> 2407
1700 -> 2628
1800 -> 2869
What this introduces is gear dependency. Someone with a considerably larger amount of item power over another player will have a significant advantage even when at the same tier level. None of the players can reliably judge the power level difference before engaging, which could lead to feelings of unfairness and randomness.
Second consequence is that high-tiered players gain asymmetric advantages over time the more item power they accumulate. In other words: gear starts to become more important than it should be. At least in a PvP-focused and skill-based game.