Item sacrification was used to increase quest difficulty before we had a quest difficulty setting, now it's pretty useless. Your proposed changes aren't bad.

300% = can't get rare items anymore (epic+ only)
500% = can't get epic items anymore (legendary+ only)
700% = increased chance for higher tiers
999% = can't get legendary items anymore (mythical+ only)
I think these guarantees would be broken, considering how some quests are still pretty easy on 300-500, others become very hard, some are still very beatable on 999% while others become exceptionally harder (e.g. 999% FGK vs 999% Scrider - just to name an extreme example). Wouldn't be fair if both provide guaranteed mythical drops.