As others have said it is a very clumsy law, it can be very difficult to use and sometimes difficult to interpret depending on the situation. But i for one would rather have it than not to give the police some power to deal with certain situations, ie: the inner city council estates/schools were kids are taking knives/screwdrivers etc with them into class. Could it be improved? Absolutely! Is it needed? Sadly, yes i think so....
Okay, so rather than scrapping the entire thing... it should be radically revised, should make it clear enough for a 5 year old to correctly interpret what situations do and don't legitimize the public possession of a pertinent item... as well as what items are and are not subject to the legislation. It also needs to add additional terms for public possession of items designed specifically as weapons (such as those "tactical pens" as one example)
Police officers need to be adequately educated on "context", and rather than being sent to court on nothing but the interpretation of a police officer these cases should be put before a small panel of officers who can make the decision as to whether the case is exempt by "legitimate reason" or should be passed along for prosecution. By your logic, multiple officers would be less likely to make a mistake than an individual officer.
Just throwing out ideas here...