As someone who hunted pretty much every NM in FFXI over their years in the game... Its not nearly as bad as you make it sound. Almost nowhere near as bad. You're describing HNMs, or NMs with 21-24 hour spawns or longer. Hes talking about 5-10minute repops. Huge difference.
HNM is not the same as NM, and 5-10 minutes is a far shot different than XI's NMs, all of which were generally either 1 hour~+ lottery or 21-24/3-7 day and such. (Its been a long time since i got my YYrobe actually, back when it was super heavily camped too.. never felt like i regretted camping it either, it was the most deliciously rewarding experience of my Summoner life)
Also, despite how badly some early HNMs were handled, I can't think of anyone who enjoyed FFXI for all those years would look back and say "Gee I wish FFXI never had open world NMs". A lot of people enjoyed the, even the obscure ones. I still have a f**kload of obscure NM items that had no real use. Bano Del Sol, Rain Hat, Mushroom Cap, Ascalon, are some of my most treasured and useless items... but I have plenty more, and theres no NM experience I think back on that was so awful I wish I had never done it. Even spending 7 hours camping that NM for Sirocco Kukri made it all the more sweeter when I had that weapon. Camping Mee Deggi and being outclaimed made it all the sweeter when I get the Ochimusha Kote them years later. Nothing about it I regret, and at the end of the day hunting obscure random useless NMs with my friends are some of my most charished memories of XI... and if adding them in XIV did nothing but help low level players and offer vanity gear, effectively making it optional for you... why would you care if they were added? What effect would they even have on your Dungeon runs or Coil?
None, literally none. Also, people liked 1.0 NMs, I admit just as many likely didn't like them, but they made the open world a bit more... living and exciting.
Yah, Hunts are basically... FATEs without a circle on the map. A swarm of people murdering a mob who ultimately your actions mean very little is not what NMs are about, these things also offer no rewards outside of more token currency that dungeons offer. S ranks are actually a real neat idea too, special spawn conditions, tough, etc. They'd be pretty perfect if they rewarded you with something other than... a line of text patting you on the back with a handful of tomes, Yipeee... a dungeons worth of tomes... yay. (Don't get me wrong they're rewarding in their own right, just not in the way those requesting NMs are asking for. Now if those S-Ranks all had a unique Weapon/Armor drop? They'd be XIV's HNMs already).
Why not both? Some low level NMs could just drop Pink Armor/Weapons instead of wholely unique items, making them a gearing alternative for some newbies. Though, perhaps people would camp them for Company seals, so maybe make the ones from NMs untradeable to GC's.