Casual players leaving for frustration or hardcore players leaving from boredom.

[Kittra]

This would be against the materia lore.
Droping rare NM gear that can be spiritbound in rare materia work better with the lore.

I'm not quite sure what you mean by materia lore. ???

What I meant by 1.x NM mechanics is literally the 5 minute maximum time to pop and a crafting item drop that could then be crafted into gear. Since SE doesn't seem to like the idea of crafted gear being on par or more powerful than what you can get from dungeons/philo/myth, I suggested NMs dropping materials for vanity gear. I know collectionists (pokemon generation) would eat that up.