That brings us back to the 'character wealth by level' thing.
Encounters are assigned their challenge ratings - estimates of how well a party of a given level and size will fare against a particular encounter. But one of the assumptions that's made is that parties will have only a certain amount of 'wealth' in the form of equipment (magic items, in particular).
This is where the crafting rules are broken. Allowing players to craft their own items - to any great extent, anyway - at a discount meant that those characters have more than the assumed magic items for their level (roughly twice as much if the crafter is really ambitious).
There's a good reason 'official' games like Pathfinder Society dis-allow the crafting rules entirely: you can't keep the game balanced.
Making the crafting cost equal to the buying cost doesn't make sense from a 'realism' perspective, but it does from a game balance perspective. The compensation here, rather than the monetary discount, will be the fact that the crafter will be able to make whatever item he wants and can afford rather than having to settle for what's available in the stall and shops in town, or having to wait to find the item he wants in a dungeon. I don't
really like that either (see my mini-rant below

) but it's better than allowing the crafting at a discount.
(Mini-Rant: This brings up for me the fact that allowing crafting for PCs at all tends to completely devalue the cool stuff one finds while adventuring, and thus removes one of the staples of fantasy roleplaying. Why would Bilbo and Frodo ever have settled for Sting, if they could have just custom ordered something 10 times better from their friends the dwarves, the elves, or Gandalf? And then where would the
story have been, without that cool sword that helps tie the whole thing together?
Once you allow crafting of magic items, and once the players get to the level they can make them, you might as well stop putting anything cool into the dungeons in the way of treasure and just put in piles of gold, 'cause for the most part all the players will want to do is sell what they find so they can make something tailored to their exact specifications.
Well, maybe not quite that extreme, but it makes my point.)