So I go get the "Ultimate Sword of Doom" and show it to my friend who is a crafter, then he goes and essentially makes himself the "Ultimate Sword of Doom +3"
You are downplaying the tremendous financial risk that crafter will be exposed to, in order to create that sword.

Any item with 5 materia is going to be very difficult to successfully make, and if you fail - you lose the materia and the item! So, we're talking:

- One of the best swords in the game to begin with
- 5 of the best materia in the game, and these sure as hell aren't going to be cheap
- the highest-rank catalyst materia (if they have ranks, I don't really know)

They actually stand to lose a hell of a lot more by creating this then you do fighting. If you die, so what? Your armor gets dinged a bit? Someone who tried to make the weapon you describe will be gambling with millions of gil. I don't see why that's any less worth it than what you do.