I think the problem could be solved with random loot that has a slight to moderate lean toward the skills and stats of party members.
What about the members that aren't currently in the party? Are you saying that the player will then have to drag along the party member they want to get loot? Those type of loot systems exist in many MMORPGs and are one of the aspects that are slowly killing them. Where is the fun in finding gear when everything you loot is always what you need? Why play at all?
There's an inherent difference in giving you bad loot you can trade to other players or characters and giving you bad loot that is in this specific game and will never be given to another player or character.
Without a down, up is meaningless. Without failure, there is no success. How does one measure without a depth of perception? The point is that if you always get something of use, then what excitement is there in getting anything at all?
