I am not sure how the current Item creation system works, but I personnaly think this is a good idea.
Hmm, May I suggest you test drive and figure out the current system first? Your 'idea' is a lot like it is done in some other games, and in another way, is like the way PS is doing it now.
I suspect the PS devs have spent more than a few minutes deciding how to set up the item crafting system after all. The only thing I would suggest would to have the text in the crafting books be more like recipes, in their order... it can be hard to see all the random text and pull out what you need to do. For example, in current system, for Book of Blades, if there was a section for 1 steel stock, and all the steps dealing with that, or the respective sabre blades, up to and including combining with a handle to make kit, would be helpful. Not the steps you need to take in order exactly, but.. Like:
Use anvil to make one sabre alpha blade from one heated stock
Use forge to make one heated alpha blade
use forge to make one superheated alpha blade
use forge to make one red hot alpha blade
use anvile to make one sabre beta blade from one heated alpha blade
use anvile to make one steel stock from one super heated alpha blade...
You get the idea...
Or you can poke me, I have a mostly IC book I trade ingame that helps with metal working and swordmaking.
Other than that, I like the current system. my 2 tria.