Sorry man, but I think you are 100% totally misunderstanding what I was describing. When I was using the word breeding, I did not mean to create a new poke out of thin air, that would be silly in a pokemon MMO setting, since it totally negates the need to hunt them entirely. We already have a "form" of breeding using egg move tutors. Basically what that means is you can take one pokemon, and teach another pokemon its move without creating a new pokemon at all.
This is what I'm suggesting when you "combine" a ditto with another pokemon. Basically you are using the ditto to transform your select pokemon BACK into a lvl 5 pre evolution form of that pokemon. IV's stay the same. No "new" pokemon is created - it's just the same one you had before, but back to baby form. Let me know if you still don't understand what I mean.
*edit*
The main problem I'm trying to address is that some pokemon in this game are just too rare and too valuable, and when someone makes a mistake with them, they can be permanently ruined. This can completely fixed that, as well as providing additional bonuses like if you enjoy leveling your favorite pokes, or making the option to add an Eviolite to your poke. Other example of pokemon alteration that we already have in this game because of how hard some pokes are to get: Moveset changing via Playedex/Berries/Egg Moves.
