Most of my passwords never need to be typed onto strange machines, so I can use 1Password with long random complex strings.

If it is a password I need to type, I use diceware "Correct Battery Horse Staple" style passwords. If I don't remember the password, I always have my phone, where I can retrieve the password from 1Password. There is no relationship between my different passwords. As long as my password vault is secure, so are all my passwords.

With your system, if I learn your master password and hashing mechanism, I basically have all your passwords.