I understand RPGs to have a heavy focus on upgrading, or leveling your character with better weapons and armour, and this is generally done by getting gear with increasingly higher numbers attached. Granting higher damage, or higher protection depending on the type of gear. This is why we going exploring and looting, to find better gear. Not to say RPGs are nothing more, but I digress.

This is no big deal with games such as Dungeon Seige, or Borderlands, or day I say WoW, where each new weapon and armour looks different then the last. It's doesn't become a matter of preference, sword B is better then sword A. There is no dispute, this item is better then that. Like I said, which each item having a unique visual appearance, even if you don't like the looks of your gear, you will find something new shortly.

Now with games like Morrowind or Fallout, the amount of detail is higher, and as result there are only something along the lines of ten sets of armour, or ten different swords. And the problem I have, is that they still follow the same rules as above, which sword B indisputably being better then sword A. In the end, everyone who picked light armour and short blade will be running around in glass armour and a daedric short sword. The problem here is the same, it's not about preference, you want the best armour? You have to wear this, or use this sword.

The way I see it, each set of armour or each weapon should be suited to a style of play, or fit for certain scenarios. Sure, in past games there have been a few inherent disadvantages to different gear but nothing serve. Sure, maybe this sword was harder to repair, or this helmet was a bit heavier taking up more inventory space, but ultimately, there was still the "best sword in the game".

I can go on about this, but I think the disadvantages and advantages to gear should have a much stronger presence so as to promote picking gear based on play style rather then numerical value. Not to say every weapon should be balanced against each other, or that there is no room to improve on weapons choice, but given the presumably limited gear selection, every piece of gear should be a viable option to the player.

Some ideas, and I liked a lot what fallout did.

-Increase moment modifiers in both +/- directions.
-Increase attack speed modifiers in both +/- directions.
-Exaggerate weight values (Heavy armour should drain fatigue more so then light, same for weapons, and yes I know this is already in place, but exaggerate it)
-Improve repair system (certain materials need to be repaired significantly more, perhaps the use of raw materials, meaning rarer weapons/ armour are much harder to repair)

And of course any other clever ideas that might exists.

Whew, that was a bit of a write up, but anyone agree or disagree with is?

Thats not what RPGs are about. However, I understand your core preoccupation (I actually made a thread titled Armor Variety). Basically, the problem is not what you say, its the lack of variety that sometimes is attached with equipping the best stuff. Its a matter of customization, and not the works of the game itself.

Simply by adding more variety to weapons and armor even in the same type, should correct it (something that past RPGs did, even).

I would like a bit more choice for the end armor types, In Oblivion it quickly plateuad for me it was leather - chain - glass, probably because of the level scaling armor was too easily available for me and I had no use to equip, let alone save up and purchase, fur or elven.

In Morrowind I was a patchwork of Chitin, Fur, Netch Leather, Glass, Savior's Hide, then Dark Brotherhood, Boots of the Apostle/Boots of Blinding Speed, Wraithguard and Wolf Armor. (This includes the expansions as well, so maybe they could simulate that experience by limitting those items to certain areas).