Before the update, you fully knew that trading in allegiance faction for amber/jade would not progress the title and was only for the individual's financial benefit only. The title was an indication to loyalty to a certain faction or a will for a title no one cared enough because the grind involved.
If you donated for your benefit while you knew this fact and you didn't donate to your guild while they required you while taking advantage of merchant discounts. This isn't the case for everyone. The price of amber/jade prices are low enough that it is almost worthless to trade for these rare materials anyway unless the faction donation is useless because your guild does not care about town ownership, name recognition, fireworks, and discounts. Now Anet gave you a way to gain progressions towards these titles for trading for your financial gain(scrolls/amber/jade) and gave a purpose to the title tracks. Not to mention that you can now progress your kurzick title while in a Luxon guild(or vise versa) now because trading for amber/jade/scrolls now progress your title so you don't need to worry about leaving your current guild to advance the other title.
The allegiance skills are a bonus or a request by some people who complained that only Nightfall campaign owners get a PvE skills benefit while Factions owners are shafted because most have thought that PvE skills may alleviate hard mode's super mobs and Factions owners could not make use of sunspear pve skills. This was predictable as testing for only a few pve sunspear skills took longer so it is reasonable that there were more pve skills involved and their possible effect if combined.
Having these to be retroactive see
http://www.guildwarsguru.com/forum/s...08&postcount=6 why this should not be.
Title based on earned allegiance factions seem like a fair deal but the fact that you lose the other faction when donating if you happen to have both seem to tell you otherwise but who knows if this may change in the future of not.