The higher you are in arena, the more and higher-values medals you get....InBronze 1 you get a measly bronze medal....1 Gold medal equals 4 of them...and you get multiple in higer tiers...

Essentially you can remain in Bronze 1...but in Gold 4 you get like 16 times the medals for a single win.

And....you need silver and gold medals to increase your Hall from a certain stage onward...

If you put up a very weak defense, you will be dropped into lower tiers

To your specific question - because offering medals for defense would be far too easy to exploit.

I guess I'm not at the breaking point yet to see such benefits, as i'm new and in the silver rankings.  I'm only at 64k power and silver III -IV, and is full of 100k+  I could be farming silver I or II instead. 

Ok. No medal for defense win. But what about with fully upgraded Great Hall, where you cant get CvC points from upgrade, and medals is useless ???

Yep. I'd like to know that as well. I'm *almost* done GH, so that's a fair number of points that will be disappearing.

Yeah, gh was a fast source of cvc points, but at that stage it's not like you can't live without them.  The ... I'll start a new thread

Farm tag arena and forge during CvC only, easily make up for the loss of GH upgrades 

Not just the GH upgrades the point, but the unuseable tokens too, when upgrading finished. You still farming tokens for nothing, after finishing upgrade. At least could be exchange fo something.