I'm fine with it...I look at it from a broad perspective.
The problem comes from the term "spending" exp. By expending exp on creating a magic item you are taking the focus of your character away from advancing in their class. By focusing on creating a magic item...they fall behind the other characters (i.e. less exp total) and the other characters may very well level sooner.
The exp loss is simulating time away from gaining levels (learning stuff). I believe that's why the "can't spend enough to de-level" rule is there...it would strech the simulation too far to lose level abilities you had.
This way you don't "lose" anything....it just slows you down a bit.
The problem comes from the term "spending" exp. By expending exp on creating a magic item you are taking the focus of your character away from advancing in their class. By focusing on creating a magic item...they fall behind the other characters (i.e. less exp total) and the other characters may very well level sooner.
The exp loss is simulating time away from gaining levels (learning stuff). I believe that's why the "can't spend enough to de-level" rule is there...it would strech the simulation too far to lose level abilities you had.
This way you don't "lose" anything....it just slows you down a bit.