I love this idea and Blizzard should take note of this or anything like it that insists that players venture out from the BFA zones and into old zones for the sake of participating in newer content (and to reap meaningful rewards). This would increase not only the incentive to go back to older zones but it also would give more purpose to professions. Professions are hurting in BFA and something like this could breath some life into them.
I love the idea of challenge. This idea would bring challenge to those who want to seek it out (which is honestly a lot of us who are still playing BFA and even those who’ve already left). To battle an elite or two in each old zone who pose a serious threat to any one or two players would be a fun challenge. That rare could drop, like you said, materials - in addition to resources, a nice chunk of gold and perhaps a small chance at a mount, pet, cosmetic, etc. This is a fantastic concept, in my estimation.
I do enjoy the retreat aspect, though I wonder how Blizzard could use that. Maybe it’s relocated to a different region of the zone. All in all I think this suggestion is amazing and I second this wholeheartedly. /clap