Definition (from http://en.wikipedia.org/wiki/Overjustification_effect):
The overjustification effect occurs when an expected external incentive such as money or prizes decreases a person’s intrinsic motivation to perform a task. According to self-perception theory, people pay more attention to the external reward for an activity than to the inherent enjoyment and satisfaction received from the activity itself. The overall effect of offering a reward for a previously unrewarded activity is a shift to extrinsic motivation and the undermining of pre-existing intrinsic motivation.
I don’t think you could find a better argument against vertical progression than this. People flocked to GW2 because of a promise that the game would be intrinsically rewarding. The gameplay was tight, the encounters were fun, the WvWvW was exciting, and the lore was interesting. Playing the game in and of itself was rewarding, and the mechanics and build choices were deep enough that you just played to get better at playing and try new challenges.
You can still do all that stuff too. It’s all still there. Nothing is stopping you from enjoying it, and yet some people had an unexplained shift in their desire to play and their motivation to log in when Ascended gear was introduced. Others don’t see what the big deal is. I recommend both sides read the above link as well as Motivation to perhaps find some understanding.
I suggest ANet read it as well, and consider reversing the changes already in place. A well designed game will have people playing because it is intrinsically rewarding. A poorly designed game will have people playing because of an imaginary carrot.
Boors, Sanctum of Rall, Officer, [Choo]