From a perspective of a modeler or a server coder, yes, small meshes are not economical. But SL is about a lot more than economy of prims or textures. If SL was made to the specifications of it's creators, every ground would have the same texture, we'd have linden trees, box houses and no one would torture prims. Result: there would be nobody here. One of the best ideas that Philip had was to let everything in SL be created by people who live there, not LL.
Creating objects of beauty that no one has ever seen or imagined before is one of the biggest draws to SL for artists and designers. Many of them are able to express themselves creatively by making things that bring them tremendous satisfaction, both from a technical and artistic standpoint. And many of them sell their creations to fellow residents. If you have looked at the marketplace jewelry offerings, you will see breathtaking creations that cannot be made (or worn) in real life - but people own and wear them here. I sell rings every day to people who get married in SL (thousands of people get married in SL every month) and they are cherished by their owners. They get engravings INSIDE the rings done, and no one ever sees it but them. When you are standing a distance away from the avatar, it's even hard to see they are wearing a ring, but what they have on may have 256 prims and took 20 hours of work to design and create.
From a jeweler's standpoint, pieces are made from parts, and small parts are our bread and butter. Many jewelers today have huge investments in sculpts and fewer people use tortured prims than in the past. Some call this lazy but there are shapes that can be made with sculpts that are difficult to make. As mesh becomes part of SL, more people will want the detail that mesh can bring by purchasing those parts from modelers. Not all jewelers want to become modelers!
I urge you most strongly to not hinder the creation of nano meshes on the basis of it being "non-economical" or "invisible at a distance". People who create small items and people who buy small items such as jewelry do not care about these issues at all. They want to make and buy things of beauty to enhance their second lives. Jewelry is such a small part of SL, I cannot imagine how limiting such a niche market will improve anyone's experience. Improve server function so that people's sex toys or dance AOs don't lag a quarter second? Is this really an issue?