Because you're not going to get **** materia from a NQ jade crook, but it's still a NQ jade crook.
You can buy a trash endgame set of gear for 100k because people spam it to make HQ's. That's the garbage people are going to be showing up to party in. They're not going to be turning even +1 gear into materia, and +1 gear's not going to make OMGBBQ materia either.

People will show up looking like stock generic players to things where performance matters, and this system gives them even more of an excuse to.