Thinking this through I agree. There should be a heirloom reset based on each persons generation.
Heirloomed items and additional WPF were the pre-patch incentives for retiring more than once (since the first time provided an opportunity to reset stats after game familiarity). With the additional WPF removed, and now heirloomed items much too expensive to use, having retired multiple times and spending weeks griding to level up again was a painful total waste of time in retrospect.
In addition, some of my double heirloomed items lost speed. They gained damage, but when I heirloomed the items it was for the speed, not damage.
I agree that a heirloom reset would be fair based on each persons generation. The same rational for reseting character stats applies to heirloomed items. Maybe this could be incorporated into the retiring options now being developed?