Yes, it was an abuse problem. The Game Director said in a Q&A it was about having “more control, as an individual, over your fate. … What group & master loot mean for many people is that their rewards are at the mercy of others in ways that often AREN’T FAIR.” See this post and the video time-mark referenced there.
Many disagree about it’s removal, but if it was perceived as not fair to the vast majority by the dev team, then it’s removal would be to restore that sense of fairness. Ion also said it would feel bad to those running sole master looter and those participating on a loot council, but he said tradeability still allows this to a large extent (not perfect), but that this was preferable for the majority. Ion also explicitly said “this change wasn’t made to stop or to curb high-end split raiding” which I would think is related to your assertion it was about slowing down gearing, but maybe not.
This sounds like a great compromise! I would be 100% in favor as long as the 20 raid members are also all in the same guild.