That's not what the problem is. We could care less about the low-tier legendary gear in the Iron Banner shop, and even less about ranking up to get it. The problem is that Bungie said Iron Banner would NEED you to have high-ranking gear, because it would make a difference based on your Attack power and Defense. It doesn't. At all. Short Answer: Bungie kinda lied...again.
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Well when I get 2 shot by a exotic and can charge down a blue auto rifle to beat down a lock, I'd say the weapons make a difference. The elements are there, maybe they need tweaking to get balanced. The game is still a baby, like all mmo's it needs to be adjusted. First event of this type, there are going to be wrinkles. Give them a few weeks to iron them out. The reason I think this event is 2 weeks instead of 1 is because I think they are taking a week to test the waters and get feed back, the patch what they can for the second week. Then take some time to re work some things before they host the event again. Even cod had weapon balancing patches.