This was, IMO, a temporary thing that should have been corrected in SAGA and later. When things go horribly, horribly wrong people stop valuing crap like gold and diamonds and begin using food, water, and clothing as the base of wealth. Once the economy gets big enough (aka recovers) for individuals to start being "wealthy" the use of consumables stops and other tokens (aka money) resumes. Iron is a necessary commodity and has the disadvantage of decaying (rusting).
The fact is that striking iron coins & ensuring purity takes work, more work than simply handing over a non-coin weight equivalent of iron. Therefore the coins are a loss-leader and cease to be cost-effective. Add in the fact that the coins will rust and cease to be authenticable and you have a second strike against iron. Once the mint has enough reputation and wealth it will switch back to a non-consumable material and the market will go on its merry way.
This was actually setting appropriate. By forbidding wizards from weilding other weapons you kept the wizard/fighter combos from happening. In a setting where the gods are weaklings afraid of the mortals the notion of a sword-weilding conan-wizard is terrifying.
Yeah, this was a pita to me as well. There were only 5 towers built and all were in Ansalon. Probably why Taladas was so well liked. The Orders of High Sorcery never really flourished and most mages do not follow the orders. Tamire shaman, dwarven craftsmen (mages!!), magically-capable gnimoi, Hulderfolk, and the Chasai'i (who don't use magic like any other race uses magic) are so very far removed from the Orders.
I treat a lot of it as propaganda. Who, in their right mind, would remain outside the Order if every mage in the world would hunt you down? Most people would fold just at the threat. And you can't tell people that you aren't all powerful or the truly devolted individuals will leave the continent to further their studies elsewhere.
