We don't know all the details, but it's a simple formulae. You can apply one powerful materia and be content that you are a good player and have adequate equipment. However, those hardcore players who have the time to invest into being "leet" can drop their risk into adding more materia to a weapon. If they fail they lose the weapon, as well as their materia, while you still contently have your materia equipped.

Suggestions I would put forward would be for second materia slot to be 90% success rate, or something along them lines, in order to balance it, and perhaps offer players the opportune to push more materia into their weapon. Again; we don't know the details, this could be the case.
Secondly having some form of Materia cap on weapons could also be imposed to stop 5xStage V Materia. Though I haven't read it through properly, this could already be the case.