I think the thing people are missing is that the proposed system would increase damage of a spell and keep the cost the same, instead of how it was in Oblivion where the damage of a spell stayed the same and the cost decreased. So it isn't a matter of "don't want to use loads of magicka to kill a rat because my only fireball spell is now awesome, then realise I should have saved it for those three ice wraiths sneaking up on me out of the snow." as some people think it is.
That being said, rather have spellmaking.
Ah, now no one actually said that before I posted, but anyway, I still would prefer a high damage fireball for powerful enemies, and a weaker one for nuisance creatures, and things like dislodging welkynd stones. I always play mages, stuff like this is important to me.
[ @OP, can't vote, no option for no spell levelling]