Two words:
It works perfectly, especially since the event is pre-structured into three tiers.
Part 1: 
cover reward tier. Nodes range from lv. 33 to lv. 111 enemies.
Part 2:
cover reward tier. Nodes range from lv. 99 to lv. 234 enemies.
Part 3:
cover reward tier. Nodes range from lv. 141 to lv. 323 enemies.
Discuss. 
The unfortunate reality is people with inadequate rosters will complain that the 4* rewards are unobtainable; some will go so far as to raise support tickets to this effect.
I suspect that this would probably result in too many 4* covers being awarded, from D3’s perspective, though. If you take a standard PvE event, the top two players in a bracket out of a thousand would get a single 4* cover, so that’s 0.2% of the player base. With node scaling like that, I suspect we’d see a much higher percentage of players obtaining that 4* cover (although I have no data to back this up). The difficulty scaling would have to be more substantial than level 323 for it to work. Having said that, if D3 are looking to ease the 3* to 4* transition, then I’m all for your proposal 
The other issue is in the 3* segment of the Gauntlet, you’re likely hitting a broader player base in terms of getting a 3* cover, which is a good thing, but it also removes the “kick start” that you get if you top ten a standard PvE, and get three 3* covers (plus the 3* progression reward, so that’s technically four 3* covers).
I’m a big fan of the Gauntlet, though, so I’m all in favour of seeing it more often, and getting useful covers from it.
Plus everyone who gets to 1000 points in a PvP, which is well above and beyond the top 0.2%. They are taking steps to increase the cover rate of 4s. Personally I would love to see a Gauntlet with a 4 as the final progression reward, mainly because The Gauntlet is so easy compared to other PvEs lately. Although 8h refresh might change that.
Mmm, an event that is actually designed to separate players in three tiers, that is non competitive and on top of that hard but fair on the final reward ?
I would really really love it, I always found the rewards of the current Gauntlet to be a tad underwhelming. I only see advantages to your proposition and no drawbacks, but I have the point of view of a player.
It’s an elegant way to help solve the 3:star: → 4:star: transition issue and it’s easy for the dev to control the inflow of 4:star: covers, they simply run this type of event as much as needed given monitored past results.
I agree too. The 3rd tier of the event is really difficult and beating the very last node requires involvement and a developed roster. Therefore, offering a 4
reward for completing a Gauntlet seems fair and logical to me.
I understand that Demiurge might fear that doing that they will distribute too many 4
covers too easily. But they just have to adapt the difficulty of the final node so that only the expected percentage of players will succeed, in average. I’m aware it’s a tricky part but it’s doable.
Moreover, this would had a new way to earn 4
fitted for a particular type of player (PvE / Challenge) and this would be consistent with their claim that they want to make 3 to 4
transition smoother. For example, I’m not fond of PvP and I’m reluctant to invest a lot of effort (and time) in it but I could try to beat the same node several times in a row in the Gauntlet for the challenge.
You might be right in the old way of thinking, but they did just give out 65 Starlord covers (if I did my math right) per TaT bracket. That’s not even including alliance rewards.
65 covers to 50 people per 1000-person bracket. And most of the alliance awards probably went to people who already got a cover for personal awards, so, at most, probably 6% of people got a cover (and I suspect something like 5.1-5.2%).
That said, that’s probably more people than complete the gauntlet, but that’s just a guess. If they want to play it ultra-safe, they can give out Yellow IW first, though a bunch of vets might not even bother with the last few nodes for that.
Excellent feedback so far, everyone.
Also, no one seemed to think it was a terrible idea.
Keep posting, forumites, so the Demi-gang can see we support their improvement efforts.
Or post if you DID think it was a terrible suggestion, but kept quiet for some reason…
Ya know, whichever…