Yup, all the gear you've worked so hard to get since the release of the Burning Crussade will be made obselete with The Wrath of the Lich King.

We did that for about 2 years, then The Burning Crusade came out, and we've been doing it again for about a year so far, seems it's about time for a change of pace and a real big update again.

Also "resetting" the gear helps even out the playing field which can especially be helpful for new characters (Ex. Deathknights) or people who want to get into raiding. Those who want to be on the bleeding edge will get back to it, but I don't think it hurts anything to do this. No items you get make you permanently great, you need to keep playing to maintain awesomeness.

The game moves forward.