It was. Although their armour looked identical, only the Valkynaz had proper Daedric Armour, the other Dremora having weaker non-lootable copies.
It was avoid the issue of marauders wearing daedric armor
Oh, as for it being taboo, I'd image so, though not AS much as holding an artifact. One would most certainly be very feared. As for the mortals using it, not all that likely. Only the most powerful of heroes will be wearing it, which is why only the PC of each game ends up really wearing it, with DF being the only NPC (outside of OB's terrible loot system).
Otherwise, ebony armor will be what the most elite of the elite will wear.