According to a friend who heard it from a friend who ( i know, that sounds like a song) is a Bliz Dev, the goal for gear is like this .Anything under item level 251 will get replaced by 85 with a mix of greens and blues from quests/drops. 251 raiding gear will have most pieces replaced by quest blues and blues dropped, but not all replaced. 264 might have an item or two replaced. 277+ will not get replaced until T11.

I guess we will have to see. 8)