Under normal circumstances, even with Remnant Dream, the drops were evidently worse.
Lu Li didn't have high expectations anyway. It was already worthwhile enough that he could upgrade his items that were under level 60.
With the equipment level penalty now in place, it would be madness to use this set of equipment to fight the Black Dragon Princess. There were others who were in the same situation. Although they had a full set of Epic items, they couldn't keep the level 55 ones, and some even had level 50 items.
Golemagg the Incinerator dropped some valuable equipment and items. There was the Sulfuron Ingot and the Blastershot Launcher.