Guild Wars 2

With conditions, of course.

1 – The loot is generated at the highest level they’ve reached
2 – They still suffer agony, etc.
3 – Clearing counts for a single increase in rank (i.e. being at 5 and clearing on 7 will let you play 6)

This will help parties form (at least along people who trust each other) and help people progress instead of having to always find exact matches to progress.

Agreed. If the loot is applied per person based on their own level, there’s no reason to stop people from playing with higher-leveled players (apart from requiring agony resistance at higher levels).

Hopefully this is an easy solution.