I just had another thought. What if the largest part of the value comes from some kind of mystical preparation of the gem and not the raw value of the gem itself, and the 'using up' of the gem still leaves you with a gem but one which is no longer suitable for spellcasting and now has only maybe 1%-10% of its former value. These could be recycled over and over again.
I could totally see that using a gem in a spell might not actually destroy it completely, but merely devalue it significantly. After all, a gem cutter might decrease a stone’s value significantly with sloppy work. (Likewise, another cutter might rehabilitate a poorly cut stone, if they’re skilled enough and have enough to work with.)
I’ve been a jewelry design hobbyist since the late-1980s, and have been enjoying shopping at the InterGem jewelry shows (including this weekend) for a couple of decades now. It never ceases to amaze me how many variables go into valuation of a stone, and what that can mean in terms of visual aesthetics and/or a gem’s usefulness.
I say that to say this: in a world where magic is real and requires material components, something’s suitability for use in magic would be accounted for in appraisals. Gems included.*
I
know- D&D uses an abstracted shorthand for valuation- a 5kGP diamond is a a 5kGP diamond is a a 5kGP diamond. But in the internal reality of the campaign setting, it might actually matter to a magical practitioner if a diamond were small but clean, well cut, and of a particular hue, as opposed to being a large, uncut crystal of a less desirable color, despite having the same price tag.
It’s possible that in such a world, a skilled & knowledgeable caster might be able to restore a gem’s magical utility with the right rituals and other materials.
OTOH, magical degradation from being used for casting might be a one-way street, leaving a mundane stone behind, suitable only for semiprecious jewelry or industrial purposes.
Hell…maybe magically exhausted gemstones become completely different materials, like uranium decaying into lead.
* gemological pun slightly intended