Getting endgame viable and actual endgame gear is still different.
This is really becoming too subjective. What's "endgame-viable" in PSO2? Sigma, Nemesis, Atlas or Croesus?
To be honest I'm not actually sure what endgame-viable weaponry you're considering was available to level 30 players on Ragol. VHard wasn't even accessible at that level unless the character had probably been carried through Dark Falz on Hard, so you may be talking about low-end uniques like Varista which are still a hard downgrade compared to their successors in higher difficulties. As for whether they can be used in Ultimate... sure, but that's not so much about gear progression being better as difficulty progression being reduced, and of the (much longer) level grind being a larger portion of PSO's progression, especially in the Dreamcast days.
To remind, PSO never had to sustain a playerbase for 9 years and counting. When moving from Dreamcast to PC to Gamecube to Xbox to PC again every last one of those moves performed a total reset and that added replay value for those who either followed a move or returned to the game for a fresh start (most likely one of the consoles to Blue Burst) which meant there was a period of time that they didn't play so they could get over burnout and let nostalgia take over before returning with a fresh start that didn't punish their absence with missed content as live-service games suffer from.
PSO2 has had to do that, and keeping a game like this alive for 9 years requires giving the players who've kept on top of their progression a fresh challenge - higher level enemies and new difficulty tiers included - at least at semi-regular intervals as well as new levels and equipment to earn to work towards overcoming that challenge.
The other subject you touch on - farming in all areas being viable - is a definite product of its age
Not really, there are several modern RPGs that follow this idea and that some items had insane drop rates and the issues with the section ID system are a different topic altogether.
It'd be nice for you to name some of these RPGs so we could compare then. I feel they may have other mitigating factors (like not being live-service at all).
As for insane drop rates enabling viable rares in all of the game's mere four areas, no, that is related because it speaks to how content variety was handled in PSO where the rate of finding any rares and the EXP gain was so low that it was generally best to just run whatever you felt like at the time in groups with EXP as the primary goal and any rares found along the way were a bonus. Hunting for specific rares as is the case with PSO2 wasn't nearly as much of a thing back then.
Replaceing "the player doing 1000 damage vs. an enemy with 10000 HP" with "the player doing 10000 damage vs. an enemy with 100000 HP" does not make for more difficult content.
Yep, but what it does do is give the player a need to progress from doing 1,000 damage to doing 10,000 damage. The replacement you speak of isn't a magic universal upgrade that applies to everything instantly; the moment the extended difficulty is added the new or tougher enemies will get 100,000 HP and the players will still be doing 1,000 damage. That's where the added progression comes from!