It's not just the loot, it's the difficulty scaling. GM 2 feels like it should be GM 4, as the spike in damage taken is so severe (as well as the sponginess of enemies).
My colossus is never in any danger in GM1 strongholds. I can tank a turret and multiple scar hunters with zero chance of death.. zero. GM2 feels like I'm back to playing a cover shooter, as I get shredded in the open. It's exactly like my first try at GM 1, without any masterwork components. But this time, I'm already in full MW/ Legendary (with one purple component, due the +75% armor inscription). There are no dramatic gear upgrades ahead for me.
You need smoother scaling from one difficulty grade to the next.
EDIT: My first reddit platinum.. thank you, internet friend! :)