Kevin,
1. The pliers you show work great for crimping. I use a similar pair for any lines I decide to crimp.
2. The pull test of 5 lbs is for the airplane, which means that for normal flight that load is shared. So your test was fairly severe if you applied 10 lb to a single line. That is 4x Factor of Safety on top of the FOS already built into the rules. To be successful with small models everything must be scaled down to match the real loads.
3. If you have the right materials and techniques, it is understood in industry (not just model airplane applications) that a proper crimp will withstand more load than the cable minimum strength quoted.
4. If you are damaging the wire inside the crimp, then you have the wrong sleeves, or are using an inappropriate tool, or crimping too hard. The sleeves must be made of soft material to conform to the wire. Deforming the sleeve work hardens it. Your description sounds like you may be using an oversize copper sleeve that is not dead soft.
5. I have purchased commercial .008 line kits and they had the same sleeves as used on .015 and .018 lines. This is ridiculously bad. No one would get a good result because the force to crush the sleeve will likely damage the wire. The amount of finesse is too high to get a consistent result. The solution are some of the tiny sleeves that are the perfect size for this. Soft copper. I got my stash from MBS.
6. The steel lines can be pretty fussy. Changing to Spiderwire makes all of that go away. You just have to tie the right knots to get good results. I like them just fine, especially if I am working with kids, since they are much more tolerant of mishandling. That said, I prefer the .008's when I'm flying a "good" airplane.
7. Dacron lines are horrible. Better to use them to make kites....
Dave