They drop reliably. Not every time but they do drop. In fact i killed the lvl 4/5 (?) elementals with a lvl 25 class and got 3-5 shards when they dropped. The possible kill speed speaks for itself. It's important to mention they i could nearly endlessly find new enemys.
Those lvl 25 elementals grooped 1-3 crystals. I haven't been willing to test for a longer duration.
As I'm lvl 26 i couldn't test the lvl 50 ones, see for yourself.
They didn't shorten the amount to get. In fact getting shards out of fish was a huge mistake, from my honest opinion. (Gatherer can find an endless amount of shards.)
We only ever have been able to split clusters and crystals, we never could upgrade them.