I don't think they should've reduced the farm rate, but I can understand why they've removed health on kills. For a good player it became way to easy to kill duo's and entire squads as you got matts and health along the way, which means that in solo's it became way to easy for good players to move from player to player with almost no risk.
I've seen it with the people around me that went from just above average players that won 1 out of 50 games and were motivated to play, to become players that feel like they have no chance at all since the change happened because the good players will always have material and health. As a result they have been playing less and less or only the LTM's for challenges and this is the data Epic is looking at.
So how does this change possibly help? First it reintroduces some risk for those players (you may get no health back from a fight) and the reduction of farm rate makes the mode a lot less fun for them as it forces a slower pace. Now those players can go to Arena if they want that play style. It will hopefully lead to less good people in normal solo's and increased win chances for everybody else. There'll still be people that like pub stomping, but my guess is there will be less.
Personally I hope they increase farm rate, but most of all I hope the people that stopped playing solos will try it out and feel like they have a chance at winning again.