I think the original team's intention was to make a battle system where a character's damage output and input is normalized. This way, players can never be too weak. On the other hand, this system does not allow a well-equipped or well-specced player to excel too far above other people in the class. As you probably know, most of the difficulty against a mob is determined by a rank comparison.

Maybe they did this to promote fairness and facilitate the more casual aspect of the game--to help people who don't have the time to perfect their equips and stats. It's hard to say at this point, but it does seem like changes of some sort will come eventually.

I understand your frustration with the second tier spells. When I hit Conjurer 24, I was really excited to try out Fire II and the rest. It didn't take very long for me to completely lose that excitement. To be fair, the second tier nukes do increase in effectiveness as you increase in Rank, but the doubling of the MP cost and higher cooldown make the benefits questionable at times.