The same complaint is often heard about 3.7V protection circuits. Many suggest that 2.54V is too low for overdischarge, and the battery may be damaged. However, there are probably hundreds of millions of lithium ion and LIPO cells out in the world protected by the DW01, which has the same shutoff point, and apparently most do fine. One suggestion is that these protection circuits are only emergency shutoffs, and your circuit should provide a separate "normal" shutoff at a higher voltage.
There is an alternate protection IC for 3.7V lithium with overdischarge at 3.0V, the part number of which I can't remember at the moment, and maybe something similar is available for your LiFePO4 cell. But if not, in theory you could use something like the DW01 in combination with your normal BMS, which would give you at least 2.5V instead of 2.1V.
Actually, they now make protection ICs that move the mosfets into the chip, so the entire circuit is now a very small three-pin IC, a capacitor and a resistor. XB7608A and FM5056 would be examples.