The most skilled players will win, we can't prevent them from playing. No matter what we do about if the host gets money from hosting the event or not, the same people will end up winning the events time and time again. Also, if the host wins first place but doesn't get recognized for first place, it's not fair to them. The person who got 2nd will still feel like they lost, the host who could have won more gold gets less than they could have had they just participated and not hosted.

I think the idea is interesting, but in practice i do not think it will work unless the host cannot participate. The current system was changed very recently right before you started playing. It used to be that event managers would not participate in any events that they hosted at all. We're looking into changing it again but I don't think your idea is a good one to be honest and I'm almost certain we're not going to go that route. It's bad for the economy (we'd be giving out more gold every event because the host gets some), it creates ambiguity, and it doesn't solve the issue of the same people winning the events over and over in the slightest.

That being said, we might still use it, or something similar, but in my 8+ years of running diablo 2 servers, every time we've tried to implement a similar system to this (and trust me, I've tried) it's never helped.