I don't feel that 5:1 is unfair at all. Keeping the process happening, investing in the space and security, there's a reason few other communities have such a setup.
I think I'd probably accept 4:1, but I think if we're going as low as 3:1 we should be getting some other less valuable commodity as well, or coins, maybe 3.7:1 for bulk.
I feel Krantarin is grand standing to try to lower the cost, I'm fairly certain he must realize the time and effort involved in turning wrought into steel is far from inconsequential, and at the bulk that he wants to trade at he's getting a massive convenience. Personally I think whoever traded with him in the past was cutting our own throats at those rates.