It is being addressed:
"We’ve heard quite a bit of feedback around the PvE upgrade tracks for gear from rated PvP sources: both the Great Vault and the Conquest vendor. Many of you are concerned that having the Conquest vendor sell gear on the Veteran track significantly reduces the potential PvE item level of most, but not all gear from rated PvP.
To address these concerns, next week we will take all Rated PvP gear on the Veteran track and move it to the Champion track. If the gear has been upgraded, it will keep its item level in this change (so Veteran 6 items will become Champion 2, Veteran 7 items will become Champion 3, and Veteran 8 items will become Champion 4). After the change is complete, current sources of Veteran Rated PvP gear will become sources of Champion Rated PvP gear.
After these changes, this means that all Conquest Gear will have a higher PvE item level potential than it did in Season 2. In Season 2, Conquest gear could be upgraded by Elite players to the equivalent of Champion 7. Once this change is complete, this gear will be upgradeable the same as any other Champion gear up to Champion 8.
This will continue to have no effect on PvP item levels."
From this post: