The compromise is that you'll be able to get a crapton of G1-G4 materials from your G3, G4, and G5 ingredients. So engineering G1-G4 should be fairly painless. Midrage ingredients are plentiful, and some high end ingredients aren't used in as many recipes, so they will essentially be midgrade ingredient pinatas.
For example, I have 50 unused MEBs in my inventory because MEBs (G5) are used in Overcharge mods. I can use these to get a couple hundred CIF (G3), which is a bottle-neck ingredient used in the majority of important top tier mod in the game: long range, double shot, Charged DPs, Dirty Drives, specialized SCBs.
And the sort of compromise you mention there is something I proposed years ago in the form of surely being able to hand in any material an engineer is interested in to build up your reputation with them. You then spend/use this reputation on your G1->G5 mods.
If you think, this is simply a streamlined version of what we have now, but without all the needless faff of have to collect individuals materials, go to Materal Brokers with spread sheets in hand, all to work out the materials you need for X rolls of G1, G2, G3, G4 and so on.
If we could just hand in any materials an Engineers is interested in for reputation with then, with common mats giving a small rise, and rare ones a large rise, the beauty would be all this daft spread sheet nonsense wouldn't be needed, and your relationship with an engineer would become a more relaxed and fun on.
ie: Periodically when you've built some mats up, go to your Engineer(s) and simply give them what you can from your current supplies. DONE!
When you've built up enough reputation you can spend it if you wish at what ever level of grades it gives you access to (G1->G5).
This to be honest would be what I'd want from The Engineers. A far more laid back and friendly mechanic, with no spreadsheets and far less needless contrived pointless faff pretending to be depth!