Ignoring the players pride for a bit, the retention rate of new players is very low. This is due (in some part) to players in both scbb and kit pvp are getting beaten by players with better kits. This provides a way to allow players to get some new kits. You are not required to give up your coins, and I doubt that the players that do decide to use this function would be able to afford all the kits for every player. Economy's are only destroyed when the currency is artificially inflated, not by trade.
You can't really inflate an economy by trade, only by introducing extra currency into the economy.
Ex.:
Bill gives john 5 bucks. Now bill has 5 and john has 15. Same amount of money, same value for each dollar. The dollars value has not changed.
Bill magically gets a dollar, so bill has 6 dollars and john has 15. There is 1 extra bill, so the value of a dollar, comparatively, is about 95% of what it was before.
It's best to have little inflation, so adding currency exchange for things like pvp would increase it a lot due to infinite coins.
For other gamemodes, (and pvp assuming no inf. coins) there wouldn't be any currency since no one starts with any.
If you fix this by spawning people with 100 coins, people could just trade those away or lose all of their coins to losses, then get mad and never play again.
Video game economies are bit... different to real economies as the goals are to keep people playing, not to make it fair like it would be in real life.
