I can't prove it, but I'm on the side of "each stat has its own limit." When I started adding Materia to my tradeskill gear, I'd have some cases where adding one type of Tier 1 materia gave diminished results after I already slotted one successfully, and adding the other types of Tier 1 Materia didn't.
It's both basically. Testing found out that the stats themselves are capped at their own individual limit that's determined by the iLVL piece of gear. For example you have two level 50 pieces of gear that are both green in quality, yet one is iLVL 50 and the other is iLVL 65. Both have two sockets, but it's only the iLVL 65 that can benefit more from pumping more into a stat you want versus the 50.
They're also not all weighted the same. You may be able to push a +2 stat piece at level 15 into +4 or +5 stat, but Determination may only be able to gain a +1 or +2 increase.
It's a fairly smart move that combines the ability to push the limits on a piece of gear's power for min/max, yet it also places limits so that they're not sooo much higher on an individual piece with something of the same rough iLVLs (within a few). Plus, for people that don't browse forums (or not often) who may not know it reinforces the idea "Dumping a ton of materia into this one stat isn't smart because it's approached the gear's hardcap on this particular stat". It's a nice method of not having to actually having to deal with (and figure out the formulae for) diminishing returns on stat allocation. Edited, Jul 30th 2013 8:44pm by Viertel
Thanks for the heads-up. And yeah, I like the implementation as well. It may invalidate the "BiS" concept, or at least render it much less vital, as you won't be able to mindlessly push 1/2 stats in any/all augmentation of your gear. Balancing main stat, crit rating, accuracy, determination, skill/cast speed etc. will make many combinations worthwhile. Plus, while the vertical progression for gear is technically there, as you say the stat boost from moving from an ilvl60 to an ilvl65 item won't turn the game into ezymode.
And for the above other comments comparing dungeon to crafted gear - while crafted HQ gear may not have the raw power stat-wise of dungeon gear (and, let's face it - we are speculating about gear strength for 50 crafted vs. 8man vs. 24man content anyway), it is far more customisable via the materia system. If the DoW DD gear (MNK/DRG stuff) from 50 dungeons is crit-heavy, working some crafted pieces with accuracy & determination stats + materia boosts may well be useful.
In summary - the game won't revolve around the economy - clearly. But with the constant destruction of gear to feed the materia system (and overclocking newly acquired gear will chew
though materia), and utilised gear being unsellable between players, every profession is effectively creating consumables - just "to be consumed" over varying lengths of time. And previous MMO experience tells us that consumable professions tend to have the greatest longevity.