Wow, great feedback guys! You've given me plenty to think about.
My thoughts on the 'complete set' scheme:
I would have to agree with you. I prefer Morrowind's style of "only having a few weapons/armor of each material", and making those materials feel quite a bit different from one another. That said, since Oblivion is set up the way it is--where each material type is only a few points (pounds, AR, damage, etc.) higher than the previous type, and complete sets of everything except Amber and Madness exist--the WEPON authors decided to stay with that scheme so as to make WEPON fit as seamlessly as possible. But then there's the MOBS option, which I think goes quite a ways towards addressing this issue.
This design was a conscious choice by the other authors and I, in other words

Why must Chitin be in a "set" stats region? There are often cases where two different materials have the same/similar strengths and weaknesses, so why can't the Default Chitin values be used. If anything it would allow the player to have a bit of armor variety, since they have more choices in that range of protection. Also, it would be IMO best to add parts of the sets in as they come. Those armor/weapon pieces are amazing and it would be a shame to not put them to use. Many people mix and match weapons and armor, so a few pieces are better than none.
As to the use of the Sotonhorian for the Adamantium armor... The Sotonhorian armor/weapon set is beautiful, an extremely well-crafted armor/weapon set. The thing is, it doesn't look much like Adamantium. It has too much detail compared to the other armors, too, so that may look strange... Basically, it's a little too good to be used as vanilla armor.
Hmm, a lot to think about here!
I think the Chitin (and for that matter, Dreugh, Stalhrim/Ice, Bonemold and other Morrowind sets) that have been created for Oblivion are fantastic, and would encourage anyone to use them. That said, the approach I'm taking in looking for a new set is to stay consistent with Bethesda's balance and basic design, as well as WEPON's original philosophy. So, that means any armor that is added must have 6 pieces, and any weapon set that is added must have 4 blunts, 4 blades, and bow+arrows. Ultimately, WEPON should feel like part of the original game, not an add-on!
Anyone who wants to add Chitin or other sets to their game, that don't mind those sets feeling modded in, can certainly use the ESPs that come with those sets

Regarding the Sotonhorian, I'm afraid you could be right! It's a great set - perhaps too good - though it does look
somewhat like what I would imagine Adamantium to look like. The right color, though perhaps a bit too fancy and not bulky enough. Other thoughts?
First off I was just asking and do encourage you to continue as you like obviously. You mod your goals. It seems you are shooting for 1. follow the hierarchy with Daedric at the top 2. Include as much lore based sets as possible and make them fit the hierarchy.
These holes you speak of - is it that you are seeing them after examining the stats of each set and see that there is an iteration or two that could be filled?
No problem, Psymon! I love getting constructive feedback, please keep it coming.
You're right on the weapon stat holes. In the weapon sets, stats increase rigidly for each "major" type - Iron, Steel, Silver, Dwarven, Elven, Glass, Ebony, Daedric. For example, each Battle Axe weighs exactly 7 pounds more than the version before it, and Damage, Health, Weight, etc. also all conform to a rigid pattern. Rusty Iron, Fine Iron, Fine Steel, Madness, Amber, Orcish, and Mithril all are calculated off of these major types. The "holes" between Dwarven and Elven, and between Glass and Ebony, mean that room still exists for weapon sets with distinctive attributes.
Is there lore to support this scheme? I mean I know it is a video game and there is a kind of hierarchy, but it seems awfully rigid. Like why couldn't the elvish excel at making light weapons and armor while the orcs excel at the heavy? Thereby the the light and heavy from each of these sets would not fall so evenly into this hierarchy? Does that make sense. Plus it would seem that some races/types may not include everything. I mean this game is not history and there is little evidence for this stuff being produced in mass quantities and why would one race, the elves for instance, say hey those orcs have heavy armor, we better get on the ball. All this reminds me of a mod that instead of unifying more armor actually breaks apart vanilla armor more and creates unique versions (same stats) ... the idea that this armor would be personalized and not look uniform.
Adamantium ... everything I've ever read about it in fantasy lit and comics is that it seems to be heavy only and it would seem that it would be bulky, but that is all subjective.
Very very true...I would have rather had a system where the weapons were more unique, like they were in Morrowind. I do like MOBS in that it attempts to give each weapon set distinctive characteristics, but still maintain overall balance. Like making the Elven weapons light and fast, while the Daedric weapons are extremely heavy and slow, but hard-hitting. I guess that's why we ended up deciding to offer WEPON in both a vanilla, and a MOBS, format

Looking back at how Adamantium appeared in Morrowind, I think you're right. Sotonhorian is a great style but just doesn't seem to match that well. I was excited about using it though since it's
almost complete, looks great, and as far as I can tell has not been used in any other mods. Other thoughts?
I'm still researching and trying to decide what to do in WEPON next, so any and all feedback is welcome!