Even if (a) more important things can be given such attention and (b) master crafters are still not given the full abilities they deserve, I still feel this slight revamp is a step in the right direction.
Since crafting is one of the systems I cherish most in this game, I was considerably nervous upon seeing a change in production... reading through this proposal, however, leaves no outright objections from me. The changes made to partial degrades and failures doesn't seem to hurt experience, but would instead actually give more for the same amount of materials currently used, which has been confirmed and will, I hope, be fully tested -- the only clarification I seeks concerns the "grade" of degraded items: for instance will a max damage/speed weapon still be a max damage/speed weapon at a lower quality? If that's the case, even degrades on supremes wouldn't be as frustrating.
That being said, as I understand it, masters will end up with a flat 85% chance of success... while it's a welcome increase, and safe from any of the proposed material loss by failure, this still leaves masters degrading upwards of 1 out of every 6 crafts. Working off gillest's post, how about increasing that base success to 90% and perhaps then allow a rite that, when completed, bumps it to 95%? (Yeah, rites, remember those out-of-whack things with potential?)
Overall, I like what I see... all these "productions," when tweaked, could make for a nice patch in the near future.