I really wish they did something like that...It makes completely sense to me and to a lot of people. I don't like how the game prevents you from powering up the mon you like just because it has not the best stats.
Now all mon have a place in a gym, why not balance them a bit more with their powering up costs? No one will ever spend the same dust maxing out a Butterfree having Mewtwo, not gonna happen. But if Butterfree costs 1/4 of Mewtwo then someone may think about it and enjoy the game with different mon than the "top" tiers.
Not sure about giving back the dust tho, but agree with everyting else.