Creating new tiers for legends is very nice to make more legend players competitive. Of course it creates more opportunities for sandbagging. But if we forget for the moment this potential problem and focus on making more player competitive then two new tiers should be created (the gap between players with 55-57 average and players with an average around 60 can still be large).
The proposition of Dazza looks interesting. The question is who should enter these new tiers. If you create a tier with players that have an average below, let says, 57 then it is safe in my opinion to use the current average as a measure. Most, if not all, players in this group can be competitive. Some are just a bit more regular, but everyone would have a chance to win or at least to make decent results. But doing so you will miss some players who should be part of it (see below).
But for the second tier for players let says between 57 and 60, this is much more problematic. You can easily have an average below 60 while not shooting that low quite often while others with a similar average are shooting low quite often. It's just a matter of how much you play. Take Hanswurst72 as an example. He has an average of 59.22 but clearly he is one of the bests. So he should be part of the top tier. This is just because he is not playing that much (500 ranked rounds) otherwise his average would be sub 57 easily.
So clearly, creating new top tiers is a good idea but, beside creating new sandbagging opportunities, it's not easy to know who should be in a given tier. And that's important to avoid frustration (if you are in a tier with too strong players) or unfairness (if a too strong player is in a tier he doesn't belong to).
Regards