Farming is affected by level because greys will not drop chests, though they will still drop body loot (lore quest items, plant food, reverse writ items, etc.). Since most of the good drops come in chests, it's usually not worthwhile to farm greys.
Really, though, in general that's not a very good reason to turn off combat exp, since higher-tier mobs drop items worth more than lower-tier ones. Unless you've hit a point where you can easily solo a specific instance for heroic-level drops (Chamber of Immortality being perhaps the most obvious example) or are farming for something in a specific level range, like adepts for transmuting, you're better off simply farming the highest-level mobs you can easily kill.