I actually don't mind encumbrance and separate inventories simply because it does actually cut down on how much you carry around. As you start to become encumbered, you start to feel like, "Dang. I really need to go to the merchant and get rid of some of this stuff." So, in that regard, I'm fine with it.
For me, it's the sifting through tons and tons of separate items and trying to figure out what I should sell, what I shouldn't sell, am I going to really need this later - and then finding out that I didn't really need to keep 90% of it at all. I could have sold it all and not dragged it around with me because I get plenty of potions for healing, plenty of weapons to throw - so I don't need apples and pumpkins to throw at goblins - and I don't NEED virtually anything I pick up.
So why juggle and sift through SO much stuff when 90% of it is stuff you won't ever need - EVER! Even IF they implemented crafting to use more of the stuff you pick up, would I need anything that I can craft? They'd better severely reduce food and items you can find if they want crafting to be even remotely worth bothering with.
In other words, if 90 spoons and 6 silver plates make it so I can forge a Breastplate (non-magical, but regular breastplate), but I can find 4 breastplates in the area and even better armor than that - or I can simply buy a breastplate or something better from a merchant in the area for a decent price - why bother collecting 90 spoons and 6 silver plates? The only way it'd be worth it to gather all that junk is if I can't find breastplates or anything better anywhere in the area. And that would probably be more frustrating than anything.
Crafting should be reserved for special equipment like how they have it currently with crafting the Sussur weapons or the ice staff. Forget all the crafting regular equipment and nonsense like that. It's just not worth all the inventory mess.
And even IF you are still going to implement that kind of crafting system, PLEASE make it super simple and easy to sell all Crafting Materials and Ingredients and Wares by tagging them and giving us a MultiSelect function or a Sell All function. That way, if I pick up everything and the kitchen sink, I can sell everything I deem is unnecessary with a few quick clicks.
