I think this idea is EXACTLY what this game needs.

Think about it, you add materia to an item, it makes it untradeable as well as enhancing stats.

This does two key things:

1.) Fixes the problem of items flooding the market, and deflation; everything is basically worthless because you can just trade your crap back into the market. In this system, you'll have to vendor things you don't want instead of reselling them.

FIXED!!!

2.) Players have complained about lack of stats affecting gameplay. Now, more than ever with materia, stats will have a more substantial effect, giving the player more of a feel for stats in general.

I think this is exactly what this game needs right now to balance some issues and give the player some meaning and weight to their actions. In both items having value and rarity, as well as stats starting to matter in the game, this is a great decision by the dev team. In conjunction with the planned battle and physical level changes, this whole thing could turn the game around!!

Keep in mind I haven't played in months, but this kind of new development is the sort of thing that make me start playing again, I'm sure with many others.