Brannigan's suggestion is the most logical, and is what should be done. All gear should be meldable. Crafted gear should be the worst, with green being better, and blue being best. Then logically, BLUE+M > GREEN+M > CRAFTED+M, maintaining the hierarchy. There is no reason why a crafted item with a single piece of materia on it should outclass all other U/U drops for that slot making what little content this game has irrelevant.