My only problem would be for those of us who are too lazy to find a weapons shop and buy new stuff every once in a while. In NV, i spent ridiculous amounts of time just running from enemies with better armor than my weak (but fast shooting) guns could handle. If damage is different depending on where you hit someone, though, then it might work as long as at least one piece is missing. Then you could just target that spot. But if this isn't in, or if you're encountering bandits encased fully in high level armor, then it would just be annoying.
Wait, isn't this a self-inflicted problem? You wasted a lot of time because you were too lazy to go into a shop, which would have required a tiny amount of time? I hope that BGS will allow for both hardcoe and casual playstyles through a vastly improved slider or set of sliders. And I'll be seriously bummed out if they go with a "streamlined" system.
If they use both DT and DR, we get a whole range of interesting effects to play with as both players and modders. It also allows better balancing of items in game. TES has a history of making a few uber-items and materials, a few "good enough" choices, and a lot of junk. If we get both DR and DT, it would open up a lot of options with weapons and armor. It creates more opportunity for trade-offs and deeper strategy. You could still have uber-items, or items that are clearly better overall, but reduce the amount of junk.
I really like the idea of using material as a base determination, but it should also be related to the item type. So ebony has certain qualities that differentiate it from steel, but chainmail should have common characteristics too.