Nicely done. Considering what the % was on that and the hat, he deserves it quite well. Now all the game needs are dropped items that are about as powerful as that, preferably even better, and it needs them for all slots. Also gear sets bonuses for dropped items would be great.
Heck, even some dropped items that are equivalent to a 5 meld that take very, very long to get by means of very tough content would be nice too. So long as the difficulty/drop rate/success rate is balanced then it's all fair game.
The lack of other very rare gear-rewarding content does not mean the materia system is bad. It means the materia system is currently the best means in getting most gear.