At least for me, decay without repair is dull. Why spend so much time grinding either gold to buy something good, or the rare mats to craft something good, if gear is just a consumable?
Instead, I'd love to see Albion's PvP item trashing sink. It works because the victims in PvP don't care that some of their gear trashed on death (and are probably happy about it), and the killers are happy to find at least some intact gear.
That mechanic powers the Albion economy, even with easy item repair.