You get over 70% received accuracy of a Grenadier model for 60% of the normal price and in almost half the time. Plus, if they are being shot by explosive weapons (so pretty much any tank gun) they are practically on par, as received accuracy has much smaller effect on AoE weapons. Granted, they would be more prone to getting forced off the field or wiped, but that's "attention tax" you pay for cost efficiency.
True, and I suppose Grens are ideally used at max range (When they're following their LMG upgrade path). I guess the issue is, as you say, them being very susceptible to being forced off the field. Four-man squads with substandard survivability can't afford to hang around till the last model. Osttruppen and Cons get around it by their squads being 50% larger. I don't know if you're really benefiting all that much in the long term, unless the squads you're rushing back onto the field are doing little but capturing territory (Or are team weapon crews).
It also may as well not even be an option for Panzergrenadiers, they ABSOLUTELY can't afford to have Osttruppen models in their squad, even if they are very cheap.
To be honest, I think for Ostheer the ability might be better/more fitting if you just got Gren models (or 1.0/0.95RA Ostruppen models) for a smaller (or no) "discount". The main benefit being that you can get your squads back onto the field faster through merging with the "replacements" squad, rather than being able to really save MP. In effect you're just "paying forward" for reinforcements.
"Cheap models into 'expensive' squad" works better for Soviet, it's already a factional trait, and their larger squad sizes make the individually weaker members less impactful. (Merging into Shocks is still an awful idea though)