In 1.0, pretty much every piece of gear up to and including level 45+ stuff sold for practically nothing, because there was nothing stopping people from just turning around and reselling their leveling gear after they'd finished using it. Supply never decreased (aside from when you converted items to materia or multi-melded, but who does that for leveling gear?), so crafters had no reason to craft, and gear was practically valueless.

Yeah, you can't flip your used gear for a profit, or even make back most of what you spent. It's necessary for a healthy economy that provides continuous demand for crafters (or at least so it doesn't make it even worse). I think it's worth the tradeoff.