The main issue I have with the rationale presented is that there is literally no Type I of the team issued photos. There would be an original file photo somewhere on a paste-up board with the name, logo, etc., stripped onto it.
Another thing I find annoying about it is that team issues are not collected for photo clarity per se, they are all about the fact that the team issued the photo in that given year as the official publicity photo of the player. Same with publicity photos, tales of the tape (boxer head to head photos with stats), and similar. It is closer to card collecting than to photo collecting.
I (and the others who I know who are into them) prefer the 'official' Type III to some random Type I image. If the market hasn't developed for that, fantastic, I get to add more of them to my PC.
Ahh well, in the end, best to not fret over PSA's designations and just try to enjoy them. Tom and Nolan agree: