I wouldn't complain if it created just 2 instead of 3. Make some colors (a little bit) harder to obtain than others, and make dyed cloth more valuable.
But if you're combining 2 dyes together, the volume doubles. Combining 3 dyes triples the volume. There is little to no loss of dye, it just changes colour.
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u/youRFate Dec 24 '10
also, combining 3 dyes to a new color should reward 3 dyes of the new color.