Game developers are always pushing for visual realism, and I think this issue is as important, or even more so, than graphics. Even if they wouldnt want to bother making more armor types, at least they could give the existing ones more variety.
It'd be cool to have dozens of different designs under, for example, "Iron Sword", "Steel Cuirass", "Elven Bow", "Leather Cuirass", ect. So even at the beginning, where every bandit has leather armor, you would still feel there's variety and not everyone is a copy of everyone else.
If they are gonna have bandits wear glass and daedric armor...at least make it look different on them >_>