I don't appreciate being called a puppy when I'm being pretty open-minded about this criticism though. Especially after all the work I have been putting into this view -and- posting for review. I know I joke about how I 'like handing out skillsets', but that's because I'm not unaware that my view is uncommon/unique. But my reasons are rooted in similar desires as yours - to see DL characters reflect their in-game performance and to be fair/consistent when interpreting casts.
I actually wasn't even referring to you for the puppy comment (although if you want to take the mantle, be my guest).
Now, for the part that actually matters: it's exactly the issue of in-game performance reflection that gets me with the skillset handing you do. When you hand a materia-like skillset to a PC or other, there's no real appreciable reflection of the -character's- performance in the DL by a low-end plot claim. Aeris doesn't use Enemy Skill any appreciably better than, say, Cait Sith or Yuffie, and any FF7 PC with E. Skill would be a Heavy champ-level contender in the DL at the very worst. You don't really have an objective reason to put, say, Leviathan on Yuffie over any other character (for a slightly stronger plot claim). You don't really have a reason to equip Restore on Cloud over another PC from a purely statistics standpoint when you can swap materia from PCs who are and aren't in the current party at any time (otherwise, there would be a minor in-game edge - maybe). No matter what the arrangement you do with FF7 or 8 PCs, or other high-customization, low-uniqueness cast, what you are reflecting isn't the character, or his strengths, or his weakness. What you will reflect is the strength of the customizable skillset given to you in the game rather than the character regardless. Trying to extract character uniqueness by complete skillset distribution is a lost cause - or, in practice, ends up not being the point of this exercise. However, wanting to see a skillset's strength reflected is fine!
Due to that, I'm suggesting you to actually save yourself some work and some grief and consider taking a broader approach - instead of selectively picking plot claims off difficult, often esoteric criteria that tend to reward circumstances even more than starting equipment does - and worse, in a way that has absolutely no reflection or basis in actual gameplay - why not allow all the cast storebought materia, for instance, and then let their stats say where they are better? This is generous, more reflective of the entire cast's in-game performance and actually fair to them, and lets them show off those skillsets that were waiting to flex their muscles.
It's not very unique, no, but you're not actually making a cast more unique by simply playing pick-a-claim either, and in casts where uniqueness is -not- a focus, you really can only go so far. Furthermore, forging false uniqueness creates new problems instead of solving the ones that were there before. I like your sentiment, Djinn, but I'm not sure if your approach -helps- solve the issues that you have. And, sadly, I feel that you sorta can't eat your cake and have it in this case - i.e. create an approach that is fair, reflective of in-game and really unique, because that's just not how some of those games function, and you're going to just stray away further from what you want in this case by forcing it in. Much like you can't, say, make Tin Man the fastest character in the game, or how you can't give Slow Down to Jude either in-game or in the DL, because that's not what the designers had in mind for them, you can't make FF7 or 8 PCs as unique as DQ8 PCs are in the way DQ8 PCs are, for instance - because that was not their focus when designing the game. There's only so much interps can do.
Tangentially, LoD doesn't really benefit much at all - damage item tosses are more an in-game thing. Psych Bomb X spamming would help, say, Meru's consistent magical damage, but it'd hurt her big damage bursts relatively due to higher averages (Miranda/Meru both would bring that up with that item's spammery), and the other items are at best comparable to physicals.