I highly doubt Shinra could simply mass produce 3rd level materia since the only way materia advance their power is through the execution of their respective abilities in battle. I'll concede that it was probably easy for at least First Class SOLDIERs to obtain basic fire/lightning/ice/quake/etc. materia, however they had to see combat in order to develop that magic into a 3rd level spell, and aside from Wutai, and I suppose Fort Condor, Gaia wasn't much of a war torn world. Shinra had a very effective tyrannical grip on citizens worldwide, and the vast majority dared not defy them. Perhaps a handful of SOLDIERs saw enough combat to advance their materia to high levels, but I wouldn't assume it was commonplace.