Too grindy, when I'd rather be roleplaying. I've been here for years and have only taken up one crafting skill since - I usually choose to do without since everything else that comes with PotM takes up enough time as is. If it remained as is I'd be fine with it, but I'd be less likely to participate.
Sorry, but it isn't very helpful to say "too grindy." I've offered specific examples and possible solutions to some aspects, which you said weren't the worst parts, but you decline to elaborate. Moreover, you say you've only once taken up crafting in (according your profile) 7 1/2 years of playing. I don't think you can be all that much "less likely to participate" as your participation is virtually nil
It's a distinct issue only if what you're describing exists in a vacuum - it doesn't.
On the contrary, improving crafting is very much a distinct issue from there being too much liquidity as crafting currently takes liquidity out of the economy only. If there is too much liquidity, it comes from other aspects of the game that, if anything, crafting is made more miserable to compensate for.
As an analogy, suppose a boat is leaking and one person is baling water out of the boat. The person baling the water says, "This is tedious and I'm tired. I think I'll quit unless you pay me better." Then your response would be, "Can't help you because the boat is full of water."
This topic is how to make water baling more enjoyable, not how to fix the leak or whether a leak exists.
Who's consuming gold in what you describe? NPC's don't spend gold since their supply is essentially limitless, rarely discriminating on what they'll spawn gold for when engaging in trade. They spawn gold into your inventory.
The crafter spends gold on templates, potion bottles, resins, alchemical containers, etc. (as well as possibly purchasing reagents, herbs, and ores from other players). The gold is just the temporary store of value representing those materials. When she crafts, she consumes them, consuming the gold she used to purchase them. By being able to sell the good, she recoups the gold she invested and can then turn it back into raw materials for her next crafting attempt.
Gold is easier for developers to "recycle" than all the various separate materials the system you favor would involve (besides having other advantages, such as affording additional RP opportunities such as the trickle down I mentioned and not leading to mere repetition of the previous crafting attempt).