The limit makes the concept completely different. If you could only get 10 rare gems ever per tier, for example, you'd save those rare gems for best in slot gear.
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I have to agree with Lore, gemming your gear doesn't take weeks of grind work. It takes 2 seconds to go to the AH and buy it, and if you're doing the dailies to get the valor gear, you probably have the money for the gems. There's no limiting factor or extreme time commitment.
I'm still not so sure about that. To me saving those gems and letting them sit in your bags for weeks and weeks as you wait for your bis gear is a completely and total waste of those gems. Those gems are doing absolutely nothing for you until you actually put them in your gear. So even if that was the case you couldn't just make a black and white statement that using them on non-bis gear is a waste, because it's also a waste to not be using them.
Again, it is absolutely no different than deciding whether to modify any piece of gear in any way, limited or not you are still deciding whether to expend resources on an item you could very well replace next week, or you could save those resources and hope to use them on that upgrade that you may or may not get. The only difference is how available/rare/plentiful the resource in question is, but it's still the same question of cost vs return.
That's why I said that it's something that you have to weigh and consider on an individual basis to determine whether a particular upgrade is worth it or not: save the valor for an item that you won't replace (which there is no such thing) or use that valor to help your progression.
Sure you'll get the best mileage by using your valor on an item that you won't be replacing for a very long time, but to take it to the extreme of "only upgrade and item if it's bis" puts you in a situation where you're not taking advantage of a system that will help your progression until you're pretty much done with progression.
Lore, this was one of the best Weekly Marmots ever. Many of my guildies share your opinion on what the upgrade system does to the mandatory feel of the rep gear. The word needs to get out on this topic!
If I may add a bit of commentary, the shorter timeframe really helped your presentation on this topic. You had a very good argument, you backed it up with math and facts, and you were succinct in your delivery. Consider doing something similar in the future even when you don't have a cold! <3