After reading reports in the loot issues thread, we spent more time investigating our rewards system. As I mentioned a few weeks ago, we verified that all loot tables are indeed working correctly in the game. Since then, we continued receiving reports that there seemed to be an issue, so we extended our search to all systems that created opportunities for you to get items from loot tables. Here we found an issue that we were able to verify was consistent across everyone who reported problems:
The rules by which you qualify for credit for an event or for experience when killing a mob are different rules than those used to help determine if you qualify for loot. Some of these were set up to be unintentionally restrictive, and as such you could kill a creature with a lot of health (this was most noticeable on champions) and not qualify for loot, despite qualifying for all other credit.
For the February Flame & Frost: The Gathering Storm release we will be repairing this issue to ensure more players are capable of earning loot credit for kills. This should fix the issue such that you got credit for killing a champion, but received no loot from it. Once fixed, all champion mobs will correctly always drop 1 blue or better loot item, and all veterans will have a chance of dropping loot better than regular mobs as outlined in the November release. Please note, it is still possible to kill a creature and not do enough damage to qualify for loot (which is the only way you won’t get loot for a champion), it is also still possible for veterans to not drop loot at all, since they simply have better odds of dropping loot than normal creatures but no guaranteed drops.
On top of this, we’re also updating some of the loot in various areas of the game for the February release that should make specific areas more rewarding. We’ll cover this is in detail with the February release notes.
Thanks very much for all your feedback and reports, that information has proved incredibly useful!
So the issue wasn't nerfed drop rates, but on how the player was considered to 'qualify' for the loot.