Nearly impossible is definitely an over exaggeration but the vast majority of it gets sent straight the bottom of the sea.
Anyways, my failing to grab said loot is certainly something I can get better at. However, the point is that as it currently stands the reward for fighting the Kraken is not worth the time or risk to get better at. The low end reward for success is that you receive a single tentacles worth of loot for your efforts after the fight which stands in stark contrast to basically every other boss fight and world event which saves it's biggest payout for the end.
Defeating the Kraken, the 'big boss fight' of the game (while not exceptionally hard) is something that shouldn't gatekeep it's rewards like that.
I do think that tentacles should still drop a majority of the loot, those that are skilled enough to weave their way in and out of the fight while grabbing anything they can should be rewarded, but at least let defeating the kraken leave more than a scant few pieces for those not yet skilled enough to do so. It's not like it leaves behind that much loot in the first place even if you do nab everything you can