Ultimately the intent is to create a revolving economy. To do that, items have to be removed. In 14 items are removed from the economy by people using them. At this point once you are done with an item, you will need to convert it to materia to get any return on your investment. And since materia is also a consumable, it helps keep things going.
If the item is non-convertable, you can NPC it (with the exception of a few items we are not allowed to sell).
Basically leaving you with one of those two options.
I know on Hyperion at least, the only thing in higher demand than teir 4 materia is teir 1. This is due to the fact that almost all crafting have materia melding quests, and that if you are spirit bonding gear, you want to attach something cheap to speed up the process.