Don't extend the buff to hard modes. Top end guilds aren't going to be happy unless they have some sort of accomplishment they can wave around. Give them that - let the guys who can make it to the hard modes wipe until their knuckles bleed - they're happiest that way. The rest of us are perfectly happy just clearing the normal modes (and don't worry we wipe plenty in the process :P )
Also, there really should be an achievement, or a mount, or some gear to go along with hard mode kills or kills that don't include the buff, even before the buff goes into effect. Raid progression and the rewards associated with it are the status symbols of WOW. Otherwise, there's really no reason for anyone to turn off the buff.
So to summarize:
1. The buff is good.
2. Don't extend it to hard modes.
3. Give extra rewards for turning the buff off.
Now, the limited attempt system...
Never ever do that, ever again. That does a whole lot of bad things. It punishes players for learning is the worst part. There's only so much you can learn from a video, sometimes you just need to learn by doing. When you have limited attempts, it limits experimentation and it limits who you can allow to try certain roles. It rewards exploits like alt raiding, which favors players with enough time to gear up an alt. It also punishes the entire guild for the connection issues of one player.
If you like, leave the heroic mode version of limited attempts. At the very least, it will give heroic mode raiders another thing to brag about

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