I totally agree with the OP because +1 mats take up WAY too much space on my retainers.
They could make it so you can trade your +1 mats for a bunch of +1 crystals, so your old +1 mats won't go to waste.
It might be hard for them to balance the drop rate of +1 crystals to match the current rate that we get +1 mats, but if it could be done, it would be amazing for saving us so much inventory space.
I think that mobs should still be able to drop +1 crystals, since mobs currently drop +1 mats all the time, but a)only if the mob is higher level than you and b) it should be easier to farm +1 crystals from gathering than it is from killing lots of mobs.
Seriously, past all the mats vs crystals business, the real issue here is INVENTORY SPACE. If you like to do multiple jobs at the same time (and you're not at 50 so you don't know exactly what items you don't need any more) then inventory space is a huge issue and the fact that +1 mats don't stack with regular mats make them take up A LOT more space.
p.s. I'm sorry that most people missed the entire point of your OP, Biggs :\ Too often people seem to form an opinion after reading the thread title and then they turn their brain off.
Also, you might want to take out the part about +3 items in your OP, since +3 items aren't being generated in the game any more and that's also contributing to people missing your point.