Good points here. I can only guess that the reason for keeping such a overbearing requirement stems from a secondary goal of the "tier system" (primary goal being abundantly clear), that being a method to "incentivize" the purging of many mid-level UL items from the game. Over the years, MA seems to have gradually made L items more appealing (i.e. Martial) yet the L market remains hindered somewhat by the sizeable amount of semi-decent UL items remaining in circulation (especially in the mid-level spectrum)
I presume that once MA/FPC actually get this debacle sorted, (or finally hires a consultant or two to ensure some of the recent half baked ideas floating from the dev team office receive proper time in the oven) that the chances of success in upgrading low to mid-level UL items will be favourable enough for many to risk a pony up to the Texas Tier Table.
Still, as you point out, with the loss of the second original item in jeopardy, its hard to see how MA will be able to set the range for failure percentage in such a way that will make this system appealing for widespread use, but also beneficial for them by not raising the bar of item efficiency if chances of success are too high.