SE has put themselves between a rock and a hard place. In theory, less than half of the team is working on 1.xx. Not to mention, while we don't know what kind of resources SE is feeding the dev team - as a game that has already failed once - I imagine they're on a tight leash. All of these adds up to a simple conclusion: there's only so much content they can add to the game over a 3 month period.

The only thing that kills a game fast than, as you put it, "...players [feeling] that they are wasting their time for no real reward", is players being done with everything and being bored. So somehow they need to stretch a little content out a long way. One way would be to put in long lockouts to extend the time it takes to do an x number of runs, another is the decrease the drop rate so that x is much larger. Neither option is exactly ideal. The former will bore players almost as much as no content at all, and the latter is what we have now.

I'm not saying their solution is a good one (actually I would prefer longer lockouts myself), but the Dev team doesn't have many options at the moment. They need to be able to produce a surplus of content before they can start easing up on these restrictions - and at the moment, they just don't have the resources for that.