I strongly disliked the way loot worked in Oblivion...once it dawned on me that loot drops depended on your level, it killed a lot of my desire to explore the world. Every ruin, cave, etc. pretty much became the same.
However, the item scaling in The Witcher 3 doesn't sound so bad, especially if it only down-scales a little bit. I don't think a default Level 20 sword that's found by a highly skilled and adventurous Lv 5 player is going to scale all the way down to Lv 5. Average skilled players probably wouldn't successfully acquire the sword until they're at or near Lv 20...they'd get their asses kicked at lower levels. As long as the GOOD loot in the world (aside from the stuff that you can only get via crafting) is only attainable by completing challenging quests or surviving areas teeming with powerful enemies, CDPR's approach to item scaling doesn't seem anywhere near as bad as Oblivion or Skyrim. Still, I don't like that they stay locked to the level you found them at, although I understand their reasoning for that.
Ideally I'd prefer no item scaling or level requirements to wield weapons or wear armor at all. Or even a system similar to how the Souls games work.
We need to keep in mind that while there's plenty of weapons and armor and stuff, The Witcher series is less loot-focused than Elder Scrolls (and obviously way less loot-focused than Borderlands).
Anyway, this item scaling, depending on its implementation, could generate a strong backlash against CDPR and The Witcher 3. Item scaling isn't really divisive...it's outright widely disliked by most hardcore gamers. If this news surfaced 6-12 months ago, then I think a lot more people would be on the fence about buying the game.