Captain Norrington, much as I agree, I think you miss the point. Yes, there's a good number who attend just for the drop, because they see it as a get rich quick scheme. Do we solve that by further encouraging the behavior, via continued drops of limited quantity?
To some degree, I think this is an "Atlantic" problem. Back at Christmas, we had the toy soldier clickys. I helped around 70 people carry theirs all back to Atlantic, where many then caught rides for their new collections back to their home shards. Many times, people said to me something along the lines of, "This is the first time I've been able to actually try to collect a full set of something rareish," always said with happiness and excitement. To a good degree, my efforts are likely why toy soldiers now sell for only 500k to 1m.
However, I don't think "everyone" drops - or let's call them what they really are, "keepsakes" - are trash. No, they're not "get rich quick" items. However, having any kind of item that IS that type - high demand, high interest, low quantity, ultra high price - is game breaking. If you spend days in shame, and come out with a piece that's so uber as to be worth hundreds of millions, then I'll agree that you've put in the effort. Realistically, though, the same simply is not true of an event drop. So someone builts a suit/character, or runs multiple clients all fighting at the *same* time (against the TOS, iirc, scripted or not), and invests the hour to do an event... and they're somehow supposed to "deserve" an item that sells for as much, if not far more, than that rare crafted item or Shame item?
I saw in general chat on Atlantic last night someone saying they'd come back recently, had done 30+ of the same boss every night for the past week, and still weren't having luck getting that boss's rare armor drop. They could buy one for 30m, but that was about 30m more than they had to spend.
You say that people get turned off by events without a drop. Realistically, I think it's far more likely that people get turned off by events *even ones that do have drops* when a) they never get one, b) they can't get one because they're not top damager (if, as some suggest here, we went back to that system), c) they can't handle the lag created by dozens of dragons and gargoyle wings all flapping while being played by a small number of people.
My experience on most non-Atlantic shards has been that the local community is quite interested in attending the event, regardless of there being a drop. If there is a drop, it's a nice surprise - and those who do get the drop end up feeling somewhat ashamed of it, at the same time they are excited at having gotten one, because so many of their friends didn't get one. Most events are RP; I think it perfectly reasonable that people would show up on their main, not on some special "event-only created-specifically-to-get-a-drop" template. However, I've been at events where the noise demanding a drop, interrupting the EM, etc, got so bad that the EM had to pause the event and threaten to cancel it. They already are to the point where people don't bother to go because their systems can't handle the lag from all the wings, only to then get to the end and never even see the boss, under the pile of dragons.
So sure; it's really nice when there's something at the end... for every participant. I have items in my collection from player events which most might consider trash - oh, I can craft that, dye it, engrave it, and have a perfect copy. However, I treasure these, because I was there, and they have memories attached. It doesn't matter to me that it may be otherwise worthless, to a collector of rare items.