We have always considered skill gain to be a process with 2 approaches: natural (you just get points, for whatever you do, and don't bother about it) and aggressive (you employ a specific strategy, often not beneficial in other terms, which maximizes skill point output).
For example, to advance Mining, you have to keep punching unprofitable asteroids; if you're keen on Prospecting, you might want to let profitable asteroids go. When doing Tracking, you might consider not even mining at all. If you use Pulse weapons, you deal much less damage (and get less loot-per-hour as a result). It goes on.
So yeah, you'll have to smelt some Iron and then Gold and then Timonium, etc. Each time you move up a material, your skill level will be high enough not to burn much yet the difficulty level will be high enough to still advance your skill. In addition, you now have a choice to burn the most costly materials specifically to advance your skill level faster.
Maybe it's not "fun", but you'll hopefully appreciate being on the top of the chain much more, once you get there.
For materials with zero burn, the profit should be a good enough reward for smelting them.
Oh, and on average, players should be getting more skill points using the new system (how much more varies between different professions).
(BTW, I took a liberty of peeking into your account. I do not consider you a newbie. Your character is pretty advanced and your smelting is great. I don't know why you bother with copper.)
Update: OK, you guys make some very good points. The real reason it's being cutoff to ZERO and not falling down gradually is rather technical (we don't store "half" points), but it would make 100% sense to go that way. Going from 1 to 0.1 in the course of 10 skill levels would've been much more nuanced and rewarding, than jumping straight to zero.
I can't argue with that, I'll shake as many trees as I can to see if we can fix this properly.