There really isn't a good reason crafting to me should even be a completely random thing. Not only is that completely frustrating for unlucky players, it doesn't even make logical sense. In the real-world, you're much more likely to succeed at something the more you try at it - you're not 20% likely to succeed the first time and also 20% to succeed the 30th time.
This by far has made the most sense. I believe the success rate needs tweaking somewhere based on the crafting skill level. For example if your craft level is at 400 and you are trying to RE a level 20 green item, perhaps it should be more like a 50% chance to get a blue. This is purely an example and in no way reflects what it actually ought to be.
Improvements for higher level/quality items need a far greater analysis due to the greater impact on game economy. The point is that a veteran level 50 crafter ought to be able to RE and craft lower level items much easier due to the 'experience' factor.