Maybe Blue, Pink gear and Green gear (crafted or dungeon drop) can be made to convert only into a new type of Ability or Trait materia rather than one of the current Stat materia's, and remove non-convertible status.

That would make the materia slightly rare, encourage players into all dungeons, give some crafters a benefit on the side, and for those who don't need philo tomes anymore a reason to continue farming that currency.