It's not just about the drop rates, it's how they were upgraded. First, it was a rare drop to get it, then you have to do various activities to level it up, next grind out materials, and then you had to sacrifice another exotic or buy an exotic shard from Xur to give it the finishing touch. This process took time and gave you show-off rights, but best of all, you felt emotionally attached to the weapon or armor from taking away your time so you could be more powerful. And this feeling was "Exotic."