I seem to recall ANet stating they were all about the player, not ‘punishing the player’ by nerfing—- of course that was ages ago prior to release of GW2. Anyway, the nerfed visual affects are very annoying, especially since I play in small groups or just solo.
I can, however, see where slightly reduced visual affects would be beneficial for large group/raid type/world boss action (lag reduction, actual sighting of the enemy etc).
The best solution would have been to implement a slider or tic box (even a keypress), perhaps something on the UI, that the player could invoke when they were involved in the kind of situation that would benefit from a downgrade in visual affects.
I hope ANet re-considers their current nerf policies.