they could make sephiroth a bit harder to beat at the end I suppose, but first time round most of the bosses were difficult for me, once you understand totally the concept of materia and the way it affects amour and weapons it makes things a lot easier
for example the Materia keeper in Nibelhiem mountains and Demons Gate at the Temple of the Ancients were really hard to beat first time round.
and I think the main reason for me not getting into ff8 was the materia system in ff7 was a million times better and more interesting
The only problem I had with the Materia system, was when your party got broken up for various reasons, you would have to spend 30mins removing the materia from the old party members and moving it accross to the new ones etc.