Lylirra addressed the topic of Nephalem Valor today over on the official Diablo 3 forums and left us with a interesting piece of information. In the future Nephalem Valor stacks will persist across different Acts.
Overall, we think Nephalem Valor does a great job at addressing two core needs. First, it helps make sure that extremely short play sessions (i.e. < 1 minute) are not the optimal way to play. Second, there's a lot of value in being able to swap your skills at will and tailor your builds to the environment around you, but there's also gameplay to finding a build that really works for you in a variety of situations -- we like that NV helps balance these two concepts, and allows players to feel like there is some commitment to a skill build without also feeling like they’re locked into that build forever. So, while there are definitely some issues with the current design, we currently think that the pros outweigh the cons of how the game would probably feel if the system were not in place.
That said, you're right -- the system isn't perfect, and we're definitely looking at ways we can do better. Certainly, one of our goals is to allow people to play game sessions that are about 5 to 10 minutes in length and still be rewarded well, but we need to make sure that in the process we don't make rapidly flipping games the go-to method. It's all about striking the right balance for a wide variety of players, and we'll definitely be keeping your feedback in mind (as well as other threads on the topic) as we explore options for how to improve NV.
Great thread!
(Oh, and PS - I can't seem to find the post where this was asked, but since it's related, we are working to allow NV stacks to persist across Acts.)