Still, I'm not entirely convinced that Pyrite will lose its value. I'd wager that Pyrite will indeed prospect into epic gems, and Black Iron Ore possibly prospecting a higher rate of epic gems, and possibly even legendary gems. This follows the progression we've seen in past expansions;
Vanilla: No gems.
TBC: Rare gems - very accessible. Epic gems - very inaccessible.
WotLK: Rare gems abundant. Epic gems - very accessible.
Cataclysm: Epic gems - very accessible. Legendary gems - very inaccessible.
This is also in line with the legendary item progression. Indeed, three legendary items have been datamined from 4.1 and 4.2, which is totally unprecedented. Blizzard also mentioned that Cataclysm may be the first expansion to feature an Artifact quality item;
Sterling beaming out!