Why is materia capped/unusable on gear?

[Lysandrus]

I understand this. But what I don't understand is why there is a cap, and why bother with materia if the items you get will already be capped in the areas that matter? Is materia to be considered just another way to make an item HQ then?

It's that way to prevent people from stacking a single stat at the expense of everything else. You can still do so to an extent by stacking as much as you can on your other gear that doesn't already have the stat in question, but just not to the extreme.