Why the Secret Spell Scroll system would have never worked.

Then they'd get duped, rendering it worse off than before. At least right now cubes/hammers/wards (lol, protection scrolls) can't be traded/duped. Having them as untradeable & store bought/quest obtained would be a slightly better approach, but that isn't going to happen.

And again it falls back to the problem being that duplication is possible.

Cut off the problem at the source then. A properly robust system wouldn't allow for it. It might make the serverside have to work harder, but if they're serious about resolving the situation, it should be done.

There are still huge problems with the economy though. The whole thing where things have a market value greater than the maximum amount of money that can be held, for one. Even if they could magically overturn all ill effect from duplicated items, there are still other major problems with the economy.