I never spoke of armor I only mentioned weapons. You're the one that keeps bringing that one up. But ontop of this it was still more cost effective to deconstruct golden equipment than it was to use and repair it. Thus is another reason why other weapons/armor were used more often.
Besides Gold Armor is worthless to nearly all classes. It only benefits one class which is Geo?
With the reduced profit of deconstructing these items people would end up collecting and using them instead of converting it into money like they do currently.
I understand, I thought you were talking about both armour and tools.
If deconstructing tools was less profitable, then sure, I reckon' people would use gold tools more (rather than deconstructing them, they'd repair/just use them, right?).
Although, how does one make deconstructing less profitable? I guess it would be possible to do so using emeralds, but at the end of the day, there isn't much point. Like you said yourself - gold isn't worth it considering how long it lasts. In addition, gold doesn't do that much more damage than diamond tools, only around 1-15 HP extra depending on the specification (as stated on the wiki). Overall, switching to emerald just for this is kinda pointless!
None the less, does this conversation have any real significance? As shown by the poll, gold is desired as the next currency!