The problem isn't the method. Killing spawning mobs is nothing new for online games, its the loot tables.
The biggest problem is that the tables seem to be mostly the same regardless of level. If they simply capped the blue drops to lvl 15+ and legendary to 20+ and exotics to 24+ there would be an issue.
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I thought the tables were very different? My friend who's level 17 hasn't seen a single blue engram drop whereas me being 25, I get them quite a lot!
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The loot tables for all enemy types are the same. What i mean by that is all the dregs have the same table regardless of level. So you have the same table and drop chances from level 5 dreg as you do from a level 26 dreg. The contents of the table and drop percentages change based on your character level not the enemy level which is flawed. This is why people can farm the caves on earth rather than being on mars with the tougher enemies.
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As your lvl progresses from 1- 20, you will unlock white > green > blue > purple > yellow; engrams/equips . In fact when you reach the lvl required and go to orbit a pop up comes up saying that you unlocked the ability to get rare/legendary/exotic engrams/equip.