Why don't we implement natural equipment degradation?
Allow all weapon and armor smiths to attempt to restore the piece at a cost, with a chance of failure to repair that increases the more it is repaired.
There can be a random check each time you are hit, and apply the damage to the armor the coincides with the location you are hit. Weapons that have been worn down are easier to cleave.
Possible skill: Equipment maintenance, slows down wear and tear rates. Weapon/armor cleaning after combat, reduces wear slightly. Even adds a nice RP element.
Certain non-rare Imm provided equipment types (restrung) can be repaired indefinitely. Equipment that is completely broken and cannot be repair does not disappear, but it does lose the rare flag and reduces in quality so much it is better to replace it with a store-bought item.
This will fix all issues of rare circulation AND provide more value for gold rather than simply using unrealistically inflated prices for 50 level supplies.
Remove the idea of rotdeath or rares that crumble on death.