To be honest, I think it is broken. However, having said that it does end up providing a bit of balance in PvP. Whether that's incidental or by design, only Bungie will know.
Put it this way: If you're dominating 30 to 1 every game, why should you automatically be handed the tools to go 50 to 1 every game? In PvP, rewarding the ones who do poorly actually starts to provide a chance for balance. They still have to do better, but look, they have a gun that can help with that.
PvE on the other hand: That Cryptarch is starting to warrant being thrown off The Tower.
I agree with you on the PvP stuff. But I'm not asking for great rewards each game, I would be fine with Uncommon's, break it down for Weapon Parts or for my Titan (Plasteel Plating)
And the Cryptarch oh boy, I'm rank 17 in that and have gotten maybe.... 5 Legendary Engrams through his Rank Up rewards