You would probably be limited to improving your ebony, or whatever you like the look of through smithing, so it's comparable to base deadric. And me personally, I have worn worse armour. I think it's only right my Altmer wear Elven instead of that horrible glass. Before, it was lose a few poins of armour rating, now we can keep the stuff we like the look of, and improve it.
...unless there's several types of armour at each tier, each of which looks different but has the same stats, which I reallllllly hope there is. Choice is a good thing, and I reckon (optimistically) that this might be one of the reasons they reduced the number of armour slots.
It was lame in Oblivion how if you wanted the best armour, you HAD to have evil-looking Daedric gear. You really should have a choice - if you want to wear a previous armour you thought looked better, you shouldn't have to be punished by losing stats as a result.
Champions Online, the MMO, do this quite well. Obviously it's very important for a superhero to look right, so you design your character and then you can apply gear for buffs - but every item can be toggled on or off, and every time you find a new costume piece, only the gear's stats are kept. This means if you find an awesome new bit of armour, you can make it look like any previous bit of gear you owned, or not show it at all, but keep the stats.
I'd like to see something similar to this in Oblivion - not that I think it'll be in (and apologies for explaining that terribly).