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Since rewards are the mechanism for turning CCs into sats, we'd at least need to replace that with something.
Ultimately, I think it is better to make everything withdrawable sats that can be withdrawable sats and moving in the other direction is sort of scammy.
I think it's a bad thing from a custody pov. Just like removing boosts is bad from a sybil pov. And removing downzaps is great... from a shamelessly self promoting scammer pov.
There are multiple hooks into the system as a whole and if your discussions (and my endless venting so I can cope with things) are proving anything, it is that balance is really, really hard to find.