RE'ing drops does not upgrade the item in anyway. only stuff that is crafted can be RE'd. once youve learned all the blue schematics from a green item and purple from blue ones the only reason to do it is to lvl up and sell the items. all the recipies you learn from a trainer including the blues can be RE'd also just a small tip: companions with high affection do missions faster, cheaper and have a higher chance of geting a crit. they also craft faster. it should only take about 5-7 to discover the new recipie. luck plays a factor in this since as far as I know its random.