This is a really good point. And where I think tweaking could be done by the game designers.
I did some simulations where I with one million successful melds, and here were the results:
There is a substantial change, here. At 5%, there would be 35% less materia used, overall. This is a wide swing, and your point is valid.
I think I'd have to give a delta, here. However, no matter the new system, I still think it should be deterministic, so you can plan to farm a specific amount, and feel safe, so you can be more like this guy:
I also try to do this as much as possible, keeping my expenses down. But you know what hurts? When your stockpile you spent weeks on is evaporated in one meld. Out of all the times I have stockpiled, there was always at least 2 specific materia I ran out of. Sure, I could go farm another 200 materia. But We raid tonight (the night new crafted gear is released). So, I need to be able to craft my stuff, today. I don't have time to go farm that out to recuperate my bad RNG.
Of all the RNG systems in the game, I don't think I have ever seen anyone praise systems which have excessive RNG behind it. Eureka's Logograms have RNG on getting the crystal, and then there's RNG on getting the mnemes you want. I remember reading many threads about the frustrations behind trying to get the actions you need, especially the ones to attempt BA. In Bozja, if you want any chance at defeating DRS, you need the Lost Actions, which is a better System than Eureka, but man does it suck to have to Spend 200k+ gil to buy 10 Fragments and only get 1 lost blood rage.
The loot system, which used to have more RNG behind it, has undergone great improvement with the chest system. It cut a layer of RNG. While there are some complaints about "{X} gear dropping every week" the books still make it deterministic. You can still have RNG, but having layers of RNG, and with it not being deterministic really just sucks the fun out of it.
It does, yes. However, that presumes you have the stockpile to be able to eat those giant losses in the first place.
And sadly, as you mentioned, Negativity Bias is a thing, too, thus people will remember the bad times more often than the 5% meld that hit in 3 attempts. This leaves the players looking at the system negatively more than positively. If that's what people tend to remember of the system, is it a good system?