It's a shame to see the Cannith Challenge gear lose the ability to have modifiers crafted onto it as I recall Challenge gear being craftable as one of the 'highlights' of the crafting system.
That said, if it's buffed to be balanced with other gear in its level range, I'm okay with that. I'd obviously like to see the ability to craft on it stay, but if it's going to cause balance issues, I'm okay with the loss. That you'd be adding augment slots to offset the loss of ability to craft on them is a good compromise, I think, especially since I've heard mention that there are eventual plans to overhaul the augment system.