You will destroy the game for everyone even including hardcore players. Raising your jewelry watermark is almost impossible. Even raising weapon watermark is a chore.
This change forces all players to grind pve. Either make outpost and war caches give better loot or you are just forcing the pvp players to grind pve elements. All players should have the option to enjoy the game in their own unique ways, nobody should be forced into a certain playstyle.
I already see gypsum being added to the store for some cheeky p2w mechanics, I do not like the direction you are taking the game in along with thousands of others.
I agree it would be cool to have a way to PvP and get a chest reward to level score. Maybe have it so you have to do some amount of OPR or maybe make some new challenging PvP dailies that could reward a chest. Arena could be another way.