I loved your post, I think you thoroughly explored the topic and your reasoning is very strong. I can't really argue with anything you've said.
However, I am gonna step in and defend what the devs are trying to do here. While it is true that nobody complained about the old system, it is clear that STS is now taking PvP balance seriously. They have two weeks worth of data and, now that they've analyzed it, they've discovered that balancing PvP going forward is far too complex with the current system. Devs proposed and half-implemented a new system. Unsurprisingly, players accustomed to the old, unbalanced system are resisting moving toward a new, balanced system.
We've all made significant investments that are dependent on the old system. But, if Arcane Legends is going to have a sustainable future, PvP must be well balanced. I have a stake in this change; as a level 23 pvp player I stand to lose a small fortune. However, I also want the game to thrive and, because devs have lately been amazingly responsive and open-minded, I'm willing to give them some breathing room and trust that they are trying to do what is best for everyone. I don't think they want to see our hard-earned gear drop 90% in value or otherwise create economic chaos.
That being said, the solution may well be that things return to what they were - idk. Whatever the case, I'd really like to see things how play out because maybe there is a happy medium where we players are satisfied AND authentic PvP balance is an achievable endeavor for devs.