I agree with it but if it would happen,I would think of something more unique.
Orcs would loot equipment of persons they killed
Elves will have items crafted for them once they reach X kills which gives them the honor of wearing those items
Humans use thieves to steal equipment from someone (sorry,don't have creative ideas for humans,never played them).
Also in the same time we could have a shop in each city where we can buy some of those items if we have the required ranks. Each item would have different stats.Also we would also be able to quest for craftable materials to forge even more powerful ones which should go hand in hand with hero customization except hero should be able to change his spells too ,become useful and be a powerforce. I know hero is supposed to be support but right now they are useless and usually ''hero'' title is for a reason .
IGN ingame: Arkantos