Disagree. Not having multi-item usage in dungeons due to its non-linear progression was a big demerit to the series.
Very interesting point. Though Twilight Princess has garnered some love recently, it seems one of its main criticisms even still is that, with very few exceptions, most items were relatively useless outside of the dungeon in which they were found. I think that Skyward Sword remedied this somewhat, though that may be due to the fact Skyward Sword placed a heavy emphasis on the sword mechanic. And much as I loved playing ALBW, you're assessment is very accurate.
That being said, I wonder how they could remedy this situation? I would think maybe using fewer, quality items (such as the hook/clawshot, bow, and etc.) could work. Shadow of the Colossus used a minimalist design style, and look at how well it did. However, most of the items players most frequently use in the Zelda series have been series staples for a long time now, and Zelda is known for introducing new and interesting items no matter how little they may be used. Hopefully they can overcome this design obstacle with the tech arrows that were introduced in the demo.
EDIT: That being said, I still think ALBW was a step in the right direction. It was fun without being bogged down by series conventions.
Admittedly when I think back to games with massive inventories like aLttP or MM, I've noted that many of the individual item functions have been folded into either other items or within Link's natural abilities (for instance, the Bug-Catching Net's function ended up becoming built straight into the Bottle's basic use) and those that haven't are either core items or items with very limited functionality to them (like the Bremen Mask or the Book of Mudora). When you get right down to it, Link's core items are:
A Boomerang (a generally low level/basic item that can retrieve distant items dropped by enemies and stun weaker ones)
Bombs (explosives used to uncover secrets or reveal passageways as well as having variable amounts of attack power and use depending on the game, but limited by stock)
A Bow (a usually powerful item that functions as your goto ranged weapon when Sword Beams are not available or useful, but like Bombs, are limited by stock)
A portable source of light (ranging from a Stick to a Lantern, never much of an attack item but essential for navigating dark locations, lighting torches, and setting other things on fire)
An instrument (from recorders to ocarinas to batons and so on, and can at the very least provide a means of fast travel and at most be the single most essential and pivotal tool in your arsenal being rivaled only by the Master Sword itself)
Potions (commonly for healing but also potentially capable of other miscellaneous effects)
A Hooked or Clawed Shot (and/or other tools capable of grappling onto distant objects to be pulled in by you or to pull yourself towards it, its combat utility is mostly for removing enemy protection or an enemy from protection but sometimes has actual combat capability)
A Hammer (for smashing, pounding, & crushing enemies and obstacles)
Something that can project fire or explosions from a range (like a Magic or Fire Rod or Fire or Bomb Arrows, always a generally advanced tool and powerful weapon and a generally useful one for tripping out of the way switches and for when the torch is out of reach)
And arm-wear that improves your lifting/pushing capability, as well as some means of traversing over or submersing under water (both kinds of tools that serve to bypass obstacles and to grant greater access to your environment though combat utility is generally nil outside of expanding your arena/options)
Everything else is either too specific in use, too dependent on whether the game is in 2D or 3D, too powerful to be doled out regularly, too complicated in function to carry over to other titles, or one of the reasons stated at the start of this post. TP's problem was that if it wasn't a core item, it either got folded into Link's Wolf form or was too gimmicky and poorly utilized beyond its dungeon.