I agree with you in principle, however the problem becomes this: if you remove "crappy" prizes (I have almost 100 Motivation Kits that I'm keeping in inventory for some inexplicable reason), then the "good" prizes become less valuable, relatively speaking. If you got a Shrine of Knowledge for every GE relic, where would you put them? Sure, they would still have value, but there would be no variety, no reason to make tough Civil Engineering decisions with your city, no challenge at all to the game. Everyone would have a city full of SoKs and Wishing Wells, and a couple of GBs, and would become disinterested in short order.
I don't need coins, supplies, happiness, goods, or headcount. In fact, right now all I need are diamonds and forge points. So should every GE prize, every Treasure Hunt prize, be just FPs and diamonds? That doesn't sound right.
So what is a good alternative? (You didn't provide any suggestions for improvements, so I'll throw an idea out there.)
How about this: For every GE or Treasure Hunt prize, you are offered the "standard" prize (whatever you rolled), or an "alternate" prize of a different type, but at 1/2 value. For example, if I "rolled" a 60,000 coin prize that I didn't want, I would be offered the option of choosing a 30,000 supply prize, or a 25 goods prize (however the "value math" works out).
How does that sound?